Income Taxes

Components of income from continuing operations before income taxes and noncontrolling shareholders’ interests were as follows:



	2016		2015		2014
United States	$	319,156	$	314,263	$	165,888
Foreign	47,937		19,765		182,631
Total	$	367,093	$	334,028	$	348,519

The provision (benefit) for income tax for continuing operations consisted of the following:



	2016			2015			2014
Current:
Federal	$	100,714		$	67,405		$	46,270
State and local	12,445			12,837			8,678
Foreign	14,990			12,948			53,120
	128,149			93,190			108,068
Deferred:
Federal	(6,730		)	23,466			5,282
State and local	(763		)	5,157			82
Foreign	(4,857		)	(3,589		)	(1,735		)
	(12,350		)	25,034			3,629
	$	115,799		$	118,224		$	111,697

A reconciliation of income tax expense (benefit) for continuing operations to the tax based on the U.S. statutory rate is as follows:



	2016			2015			2014
Income tax provision at 35%	$	128,483		$	116,910		$	121,982
Expiration of capital loss carryforward	—			18,376			—
Valuation allowance	(2,441		)	(18,200		)	1,382
State and local income tax, net of federal income tax effect	8,693			12,321			7,123
Domestic manufacturing deduction	(9,870		)	(6,580		)	(3,745		)
U.S. tax credits	(3,013		)	(3,186		)	(1,455		)
Tax law or rate change	794			2,383			—
Difference in effective tax rates of international operations	(4,900		)	(932		)	(35,095		)
Other - net	(1,947		)	(2,868		)	(262		)
Tax on gain from sale of CCT	—			—			21,767
Provision for income taxes	$	115,799		$	118,224		$	111,697

Payments for income taxes in 2016, 2015 and 2014, net of refunds, were $131,001, $76,206 and $63,390, respectively.

Deferred tax assets and liabilities result from differences in the basis of assets and liabilities for tax and financial reporting purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31 were as follows:



	2016			2015
Deferred tax assets:
Postretirement and other employee benefits	$	191,099		$	197,657
Product liability	67,528			61,456
Net operating loss, capital loss, and tax credit carryforwards	15,274			11,187
All other items	48,718			45,747
Total deferred tax assets	322,619			316,047
Deferred tax liabilities:
Property, plant and equipment	(160,075		)	(156,520		)
All other items	(9,685		)	(10,399		)
Total deferred tax liabilities	(169,760		)	(166,919		)
	152,859			149,128
Valuation allowances	(20,228		)	(15,103		)
Net deferred tax asset	$	132,631		$	134,025

At December 31, 2016, the Company has foreign tax losses of $59,115 available for carryforward. The Company has $2,162 of U.S. federal tax credits and $254 of state tax credits available for carryforward. Valuation allowances have been provided for those items for which, based upon an assessment, it is more likely than not that some portion may not be realized. The U.S. federal and state tax attributes will expire from 2017 through 2027.

The Company applies the rules under ASC 740-10 in its Accounting for Uncertainty in Income Taxes for uncertain tax positions using a “more likely than not” recognition threshold. Pursuant to these rules, the Company will initially recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on the Company’s estimate of the largest amount that meets the more likely than not recognition threshold. The Company’s unrecognized tax benefits, exclusive of interest, totaled approximately $3,197 at December 31, 2016, as itemized in the tabular roll forward below. The unrecognized tax benefits at December 31, 2016 relate to uncertain tax positions in tax years 2012 through 2016. Based upon the outcome of tax examinations, judicial proceedings, or expiration of statutes of limitations, it is reasonably possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities.



	Unrecognized Tax Benefits
Balance at December 31, 2013	$	5,878
Additions for tax positions of the current year	230
Additions for tax positions of prior years	2,206
Balance at December 31, 2014	8,314
Settlements for tax positions of prior years	(367		)
Additions for tax positions of prior years	1,151
Reductions for tax positions of prior years	(942		)
Statute lapses	(2,313		)
Balance at December 31, 2015	5,843
Settlements for tax positions of prior years	(518		)
Additions for tax positions of the current year	714
Additions for tax positions of prior years	1,518
Statute lapses	(4,360		)
Balance at December 31, 2016	$	3,197

Of this amount, the effective rate would change upon the recognition of approximately $3,197 of these unrecognized tax benefits. The Company accrued, through the tax provision, approximately $(347) of benefit on interest reduction for 2016 and $63 and $261 of interest expense for 2015 and 2014, respectively. At December 31, 2016, the Company has $141 of interest accrued as an ASC 740-10 reserve.

The Company generally considers the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States. In the event that the Company plans to repatriate foreign earnings, the income tax provision would be adjusted in the period it is determined that the earnings will no longer be indefinitely invested outside the United States. The Company has not recorded a deferred tax liability related to the U.S. federal and state income taxes and foreign withholding taxes on approximately $596,216 of these undistributed earnings. It is not practicable to determine the amount of additional U.S. income taxes that could be payable upon remittance of these earnings since taxes payable would be reduced by foreign tax credits based upon income tax laws and circumstances at the time of distribution, plus the uncertainty in estimating the impacts of future exchange rates.

The Company operates in multiple jurisdictions throughout the world. The Company has effectively settled U.S. federal tax examinations for years before 2013 and state and local examinations for years before 2012, with limited exceptions. Furthermore, the Company’s non-U.S. subsidiaries are generally no longer subject to income tax examinations in major foreign taxing jurisdictions for years prior to 2008. The income tax returns of certain of our subsidiaries in various jurisdictions are currently under examination and it is possible that these examinations will conclude within the next twelve months. However, it is not possible to estimate net increases or decreases to the Company’s unrecognized tax benefits during the next twelve months.