TAXES ON INCOME (TAX BENEFITS)

Income (loss) from continuing operations before taxes on income (tax benefits) was as follows for the years ended December 31 (in thousands):



	2014			2013		2012
Domestic	$	(75,112	)	$	23,695	$	45,290
Foreign	39,137			35,307		25,576
Total	$	(35,975	)	$	59,002	$	70,866

Provisions (benefits) for taxes on income (tax benefit) from continuing operations consisted of the following components for the years ended December 31 (in thousands):



	2014			2013			2012
Current:
Federal	$	(2,112	)	$	8,603		$	9,237
Foreign	10,586			6,078			9,704
State	2,635			527			995
Subtotal	11,109			15,208			19,936
Deferred:
Federal	(18,629		)	(2,075		)	(1,817		)
Foreign	3,034			(727		)	69
State	646			(252		)	475
Subtotal	(14,949		)	(3,054		)	(1,273		)
Total tax provision	$	(3,840	)	$	12,154		$	18,663

Income tax (benefit) expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% to income (loss) before income taxes, equity in income (loss) of joint ventures and minority interests as a result of the following (in thousands):



	2014			2013			2012
Income taxes at U.S. federal statutory tax rate	$	(12,591	)	$	20,651		$	24,803
Increase (decrease) in taxes resulting from:
Change in the balance of the valuation allowance for deferred tax assets allocated to foreign income tax expense	7,785			1,447			3,714
Change in the balance of the valuation allowance for deferred tax assets allocated to state income tax expense	5,206			115			(10		)
State income taxes, net of federal income tax benefit	(3,073		)	64			966
Transaction costs	—			—			509
Meals and entertainment	863			1,034			962
Changes in taxes previously accrued	(1,932		)	(3,098		)	(2,422		)
Foreign tax rate differences	(9,215		)	(4,892		)	(4,236		)
Goodwill impairment	9,690			—			—
Recognition of uncertain tax positions	(96		)	(89		)	(800		)
Contingent consideration reversal	—			(1,461		)	(2,869		)
Domestic Production Activities deduction	(81		)	(1,548		)	(1,440		)
Other matters	(396		)	(69		)	(514		)
Total tax provision	$	(3,840	)	$	12,154		$	18,663
Effective tax rate	10.7		%	20.6		%	26.3		%

Net deferred taxes consisted of the following at December 31 (in thousands):



	2014			2013
Deferred income tax assets:
Foreign tax credit carryforwards	$	1,477		$	535
Net operating loss carryforwards	19,355			17,146
Accrued expenses	21,378			13,517
Other	7,207			8,158
Total gross deferred income tax assets	49,417			39,356
Less valuation allowance	(19,353		)	(7,797		)
Net deferred income tax assets	30,064			31,559
Deferred income tax liabilities:
Property, plant and equipment	(7,499		)	(12,901		)
Intangible assets	(22,653		)	(34,983		)
Undistributed foreign earnings	(7,051		)	(7,051		)
Other	(6,859		)	(7,548		)
Total deferred income tax liabilities	(44,062		)	(62,483		)
Net deferred income tax liabilities	$	(13,998	)	$	(30,924	)

The Company’s tax assets and liabilities, netted by taxing location, are in the following captions in the balance sheets (in thousands):



	2014			2013
Current deferred income tax assets, net	$	9,516		$	4,640
Current deferred income tax liabilities, net	(3,935		)	(4,304		)
Noncurrent deferred income tax assets, net	3,334			6,957
Noncurrent deferred income tax liabilities, net	(22,913		)	(38,217		)
Net deferred income tax liabilities	$	(13,998	)	$	(30,924	)

The Company’s deferred tax assets at December 31, 2014 included $19.4 million in federal, state and foreign net operating loss (“NOL”) carryforwards. These NOLs include $10.5 million, which if not used will expire between the years 2015 and 2034, and $8.9 million that have no expiration dates. The Company also has foreign tax credit carryforwards of $1.5 million, of which $0.5 million has no expiration date.

For financial reporting purposes, a valuation allowance of $19.4 million has been recognized to reduce the deferred tax assets related to certain federal, state and foreign net operating loss carryforwards and other assets, for which it is more likely than not that the related tax benefits will not be realized, due to uncertainties as to the timing and amounts of future taxable income. The valuation allowance at December 31, 2013 was $7.8 million. Activity in the valuation allowance is summarized as follows for the years ended December 31 (in thousands):



	2014			2013			2012
Balance, at beginning of year	$	7,797		$	6,574		$	4,691
Additions	14,442			1,754			2,062
Reversals	(2,090		)	(131		)	(191		)
Other adjustments	(796		)	(400		)	12
Balance, at end of year	$	19,353		$	7,797		$	6,574

The Company has recorded income tax expense at U.S. tax rates on all profits, except for undistributed profits of non-U.S. subsidiaries of approximately $277.0 million, which are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to the indefinitely reinvested profits is not feasible. A deferred tax asset is recognized only if the Company has definite plans to generate a U.S. tax benefit by repatriating earnings in the foreseeable future.

FASB ASC 740, Income Taxes (“FASB ASC 740”), prescribes a more-likely-than-not threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FASC ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosure of uncertain tax positions in financial statements.

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):



	2014			2013			2012
Balance at January 1,	$	2,936		$	3,170		$	1,050
Additions for tax positions of prior years related to acquisitions	—			—			3,145
Additions for tax positions of prior years	36			30			111
Lapse in statute of limitations	(252		)	(236		)	(1,162		)
Foreign currency translation	(48		)	(28		)	26
Balance at December 31, total tax provision	$	2,672		$	2,936		$	3,170

The total amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate was $0.5 million at December 31, 2014.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2014, 2013 and 2012, approximately $0.3 million, $0.3 million and $0.6 million, respectively, was accrued for interest.

The Company believes that it is reasonably possible that the total amount of unrecognized tax benefits will change in 2015. The Company has certain tax return years subject to statutes of limitation that will expire within twelve months. Unless challenged by tax authorities, the expiration of those statutes of limitation is expected to result in the recognition of uncertain tax positions in the amount of approximately $0.2 million.

The Company is subject to taxation in the United States, various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2010.