(8) Income Taxes

The significant components of the Company’s deferred income tax liabilities and assets are as follows:


	December 31,
	2016		2015
	(in millions)
Deferred income tax liabilities:
Excess tax over book depreciation	$	15.5	$	16.2
Intangibles		55.2		48.1
Goodwill		20.4		17.8
Other		6.1		4.5
Total deferred tax liabilities		97.2		86.6
Deferred income tax assets:
Accrued expenses		22.9		26.8
Capital loss carry forward		1.4		3.6
Net operating loss carry forward		7.3		8.9
Inventory reserves		13.5		13.1
Other		13.5		14.0
Total deferred tax assets		58.6		66.4
Less: valuation allowance		(7.1)		(9.5)
Net deferred tax assets		51.5		56.9
Net deferred tax liabilities	$	(45.7)	$	(29.7)

The provision for income taxes is based on the following pre‑tax income:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
Domestic	$	64.8	$	(25.8)	$	44.2
Foreign	$	63.0		(85.2)		38.9
	$	127.8	$	(111.0)	$	83.1

The provision for income taxes consists of the following:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
Current tax expense:
Federal	$	18.3	$	3.4	$	12.8
Foreign		17.2		18.1		20.4
State		3.9		2.0		2.7
		39.4		23.5		35.9
Deferred tax expense (benefit):
Federal		3.6		(13.6)		2.1
Foreign		0.6		(7.0)		(5.2)
State		—		(1.0)		—
		4.2		(21.6)		(3.1)
	$	43.6	$	1.9	$	32.8

Actual income taxes reported are different than what would have been computed by applying the federal statutory tax rate to income before income taxes. The reasons for these differences are as follows:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
Computed expected federal income expense	$	44.7	$	(38.8)	$	29.1
State income taxes, net of federal tax benefit		2.2		0.8		2.1
Foreign tax rate differential		(6.7)		7.5		(4.2)
Goodwill impairment		—		29.0		3.2
Change in valuation allowance		—		(1.8)		—
Other, net		3.4		5.2		2.6
	$	43.6	$	1.9	$	32.8

At December 31, 2016, the Company had foreign net operating loss carry forwards of $27.2 million for income tax purposes before considering valuation allowances; $22.9 million of the losses can be carried forward indefinitely, and $4.3 million expire in 2023. The net operating losses consist of $22.9 million related to Austrian operations and $4.3 million to Dutch operations.

At December 31, 2016, the Company has U.S. capital loss carry forwards of $1.5 million for income tax purposes before considering valuation allowances; $1.0 million expire in 2017 and $0.5 million expire in 2018.

At December 31, 2016 and December 31, 2015, the Company had valuation allowances of $7.2 million and $9.5 million, respectively. At December 31, 2016, $1.5 million relates to U.S. capital losses and $5.7 million relates to Austrian net operating losses. At December 31, 2015, $3.6 million related to U.S. capital losses and $5.9 million related to Austrian net operating losses. Management believes that the ability of the Company to use such losses within the applicable carry forward period does not rise to the level of the more likely than not threshold. The Company does not have a valuation allowance on other deferred tax assets, as management believes that it is more likely than not that the Company will recover the net deferred tax assets. Management believes it is more likely than not that the future reversals of the deferred tax liabilities, together with forecasted income, will be sufficient to fully recover the deferred tax assets.

Changes enacted in income tax laws had no material effect on the Company in 2016, 2015 or 2014.

Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $346.1 million at December 31, 2016, $366.1 million at December 31, 2015, and $386.0 million at December 31, 2014. Those earnings are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state income taxes has been recorded thereon. Upon distribution of those earnings, in the form of dividends or otherwise, the Company will be subject to withholding taxes payable to the various foreign countries. Determination of the amount of U.S. income tax liability that would be incurred is not practicable because of the complexities associated with its hypothetical calculation; however, unrecognized foreign tax credits may be available to reduce some portion of any U.S. income tax liability.