12. INCOME TAXES

The Company files income tax returns for U.S. federal and various U.S. states, as well as various foreign jurisdictions. The liabilities for unrecognized tax benefits are carried in Other long-term liabilities on the consolidated balance sheets because the payment of cash is not anticipated within one year of the balance sheet date.

The components of income (loss) before income taxes consisted of the following (in thousands):

	SUCCESSOR								PREDECESSOR
	Year Ended		Year Ended			Period Ended			Period Ended
	December 31,		December 31,			December 31,			March 31,
	2016		2015			2014			2014
Domestic	$	18,016	$	(12,294	)	$	(23,893	)	$	(1,069	)
Foreign jurisdictions	$	3,941	$	4,464		$	2,854		$	847
Income (loss) before income taxes	$	21,957	$	(7,830	)	$	(21,039	)	$	(222	)

Income tax provision (benefit) consisted of the following (in thousands):

	Current		Deferred			Total
Successor Year ended December 31, 2016
U.S. Federal	$	15,105	$	(8,784	)	$	6,321
U.S. state and local		1,636		(524	)		1,112
Foreign jurisdictions		710		389			1,099
	$	17,451	$	(8,919	)	$	8,532

Successor Year ended December 31, 2015
U.S. Federal	$	11,067	$	(11,995	)	$	(928	)
U.S. state and local		1,119		(761	)		358
Foreign jurisdictions		1,372		41			1,413
	$	13,558	$	(12,715	)	$	843

Successor Period ended December 31, 2014
U.S. Federal	$	1,817	$	(8,941	)	$	(7,124	)
U.S. state and local		245		(606	)		(361	)
Foreign jurisdictions		853		(71	)		782
	$	2,915	$	(9,618	)	$	(6,703	)

Predecessor Period ended March 31, 2014
U.S. Federal	$	342	$	659		$	1,001
U.S. state and local		52		(38	)		14
Foreign jurisdictions		320		(321	)		(1	)
	$	714	$	300		$	1,014

The difference between the statutory rate for federal income tax and the effective income tax rate was as follows (in thousands):

	SUCCESSOR																PREDECESSOR
	Year Ended					Year Ended						Period Ended					Period Ended
	December 31,					December 31,						December 31,					March 31,
	2016					2015						2014					2014
Income tax expense calculated at the federal statutory rate	$	7,685		35.0	%	$	(2,740	)		35.0	%	$	(7,363	)	35.0	%	$	(78	)		35.0	%
Effect of:
State and local taxes, net of federal benefit		912		4.2			487			(6.2	)		219		(1.0	)		208			(93.8	)
Tax on foreign earnings, net of tax credits and deductions		(26	)	(0.1	)		(330	)		4.2			(261	)	1.2			(440	)		197.8
Change in valuation allowance		-		-			-			-			-		-			789			(354.3	)
Permanent items:
Goodwill impairment		-		-			2,106			(26.9	)		-		-			-			-
Stock-based awards		(534	)	(2.4	)		778			(9.9	)		332		(1.6	)		278			(125.2	)
Other		174		0.8			185			(2.4	)		730		(3.5	)		296			(133.1	)
State/Local tax credits		(1,049	)	(4.8	)		(931	)		11.9			(573	)	2.7			(208	)		93.6
Change in liability for uncertain tax positions		1,212		5.5			1,250			(16.0	)		249		(1.2	)		169			(76.1	)
Other		158		0.7			38			(0.5	)		(36	)	0.2			-			-
	$	8,532		38.9	%	$	843		(10.8)%			$	(6,703	)	31.8	%	$	1,014		(456.1)%

The undistributed earnings of foreign subsidiaries at December 31, 2016 and 2015 were approximately $15.1 million and $10.4 million, respectively, and have been permanently reinvested. It is not practicable to determine the amount of the additional taxes that would result if these earnings were repatriated.

Components of the Company’s net deferred tax liability included in the consolidated balance sheets consisted of the following at December 31 (in thousands):

	SUCCESSOR
	2016			2015
Deferred tax assets:
Accrued liabilities	$	19,393		$	15,746
Depreciation and amortization		1,787			1,995
Foreign operating loss carryforward		246			250
U.S. state and local tax credits and carryforward		385			153
Other		1,209			1,132
Valuation allowance		(987	)		(1,021	)
Total deferred tax assets		22,033			18,255

Deferred tax liabilities:
Depreciation and amortization		(33,436	)		(38,970	)
Prepaid expenses		(310	)		(161	)
Other		(220	)		(71	)
Total deferred tax liabilities		(33,966	)		(39,202	)
Net deferred tax liability	$	(11,933	)	$	(20,947	)

The deferred tax asset attributable to U.S. state and local tax credits and carryforwards above includes less than $0.1 million for U.S. state and local operating loss carryforwards that will expire in 2029 if not utilized.

The Company has foreign operating loss carryforwards for which a deferred tax asset of $0.2 million has been established. The Company has a valuation allowance of $0.2 million against this deferred tax asset based upon its assessment that it is more likely than not that this amount will not be realized. The ultimate realization of this tax benefit is dependent upon the generation of sufficient operating income in the respective tax jurisdictions. Approximately 74% of the foreign net operating loss carryforwards can be utilized over an indefinite period whereas the remainder will expire at various times from 2020 to 2025 if not utilized.

In December 2013, the Company recorded an impairment loss of $2.3 million and an associated deferred tax asset of $0.8 million on its cost method investment in a related party. In March 2014, the investment was sold and the company incurred a capital loss. This loss is limited to offset future capital gains which the Company does not anticipate will be generated, thus a valuation allowance of $0.8 million has been recorded as it is more likely than not that realization cannot be assured.

Annual activity related to the Company’s valuation allowance is as follows (in thousands):

	SUCCESSOR									PREDECESSOR
	Year Ended			Year Ended			Period Ended			Period Ended
	December 31,			December 31,			December 31,			March 31,
	2016			2015			2014			2014
Beginning Balance	$	1,021		$	1,086		$	1,103		$	305
Additions charged to expense		-			-			-			798
Reductions from utilization, reassessments and expirations		(34	)		(65	)		(17	)		-
Ending Balance	$	987		$	1,021		$	1,086		$	1,103

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands):

	SUCCESSOR									PREDECESSOR
	Year Ended			Year Ended			Period Ended			Period Ended
	December 31,			December 31,			December 31,			March 31,
	2016			2015			2014			2014
Beginning Balance	$	2,604		$	1,353		$	1,092		$	938
Increases in tax positions for prior years		-			-			31			134
Decreases in tax positions for prior years		(196	)		(14	)		(8	)		-
Increases in tax positions for current year		3,365			1,265			238			20
Lapse in statute of limitations		(75	)		-			-			-
Ending Balance	$	5,698		$	2,604		$	1,353		$	1,092

Interest and penalties associated with uncertain tax positions are recognized as components of Income tax provision (benefit) in the consolidated statements of operations. There was no material change to tax-related interest and penalties during the Successor years ended December 31, 2016 and 2015, the Successor Period ended December 31, 2014 and the Predecessor Period ended March 31, 2014. As of December 31, 2016 and 2015, respectively, the Company has a liability for interest and penalties of $1.0 million and $0.6 million that is associated with related tax liabilities of $4.3 million and $1.8 million for uncertain tax positions.

The Company operates in various foreign, state and local jurisdictions. The number of tax years for which the statute of limitations remains open for foreign, state and local jurisdictions varies by jurisdiction and is approximately four years (2012 through 2016). For federal tax purposes, the Company’s open tax years are 2012 through 2016.