Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Deferred Tax Assets and Deferred Tax Liabilities

The deferred tax assets and deferred tax liabilities and related valuation allowance were comprised of the following:

	December 31,
	2017			2016
Deferred tax assets:
Net operating losses		12,731			13,643
Research and development credits		27,257			23,012
Depreciation		5,571			5,457
Valuation reserves and accrued liabilities		6,020			9,667
Foreign tax credit		—			6,926
Stock compensation		3,955			4,508
Inventory		2,062			1,571
Patents		163			218
Defined benefit obligation		1,977			2,306
Other credits		589			639
Unrealized foreign currency exchange loss		2,556			—
Other		36			116
		62,917			68,063
Valuation allowance		(27,578	)		(19,304	)
Deferred tax liabilities:
Intangible assets		(2,925	)		(8,442	)
Unrealized foreign currency exchange gains		—			(285	)
Undistributed profits of subsidiary		(6,450	)		(12,002	)
Property and equipment		(1,611	)		(470	)
Other		(548	)		(319	)
		(11,534	)		(21,518	)
Net deferred tax asset	$	23,805		$	27,241

Reconciliations Between Statutory Federal Income Tax Rate and Effective Rate

Reconciliations between the statutory Federal income tax rate of 34% and the effective rate of income tax expense for each of the three years in the period ended December 31, 2017 are as follows:

	Year Ended December 31,
	2017			2016			2015
Statutory Federal income tax rate		34.0	%		34.0	%		34.0	%
Increase (Decrease) resulting from:
U.S. Taxes on foreign income, net of taxes paid credit		—			1.3	%		1.0	%
Change in valuation allowance		10.6	%		5.3	%		(1.9	%)
Foreign, state and local tax, net of Federal benefit		0.8	%		1.1	%		1.6	%
Nondeductible expenses		2.4	%		2.4	%		1.8	%
Stock option compensation		(2.2	%)		—			(0.1	%)
Research and development credits		(4.6	%)		(0.7	%)		(0.9	%)
Effect of different tax rates of foreign jurisdictions		(20.8	%)		(15.0	%)		(12.1	%)
Undistributed profits of subsidiaries		5.8	%		7.9	%		2.4	%
Tax reform items		29.1	%		—			—
Other tax exempt income		—			—			(0.1	%)
Tax effects of intercompany transfers		(5.0	%)		(5.3	%)		—
Other		(1.0	%)		(0.3	%)		0.3	%
Effective rate		49.1	%		30.7	%		26.0	%

Net Operating Loss Carryforwards

The Company has Net Operating Loss (“NOL”) carryforwards as follows:

Jurisdiction	Amount as of December 31, 2017		Years of Expiration
U.S. Federal and state income tax	$	61,302		2018- 2036
Foreign	$	12,499		2018-2037
Foreign	$	24,911		Indefinite

Earnings Before Income Taxes

The earnings before income taxes and our tax provision are comprised of the following:

	Year Ended December 31,
	2017		2016		2015
Income before income taxes:
Domestic	$	1,258	$	12,981	$	25,508
Foreign		67,997		97,582		103,430
Total income before income taxes	$	69,255	$	110,563	$	128,938

Provision for Income Taxes

	Year Ended December 31,
	2017			2016			2015
Current income tax expense:
Federal	$	4,140		$	9,215		$	8,428
State and local		150			749			606
Foreign		24,672			32,844			24,622
Total current income tax expense	$	28,962		$	42,808		$	33,656
Deferred income tax expense (benefit):
Federal	$	15,207		$	(10,597	)	$	(3,051	)
State and local		2,308			(742	)		(183	)
Foreign		(12,449	)		2,496			3,123
Total deferred income tax expense	$	5,066		$	(8,843	)	$	(111	)
Total tax expense	$	34,028		$	33,965		$	33,545

Reconciliation of Unrecognized Tax Benefits

The reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year Ended December 31,
	2017			2016			2015
Balance at beginning of year	$	4,486		$	4,443		$	4,651
Additions based on tax position related to current year		1,758			80			—
Additions based on tax positions related to prior year		(4	)		366			262
Reductions from settlements and statute of limitation expiration		(2,247	)		(299	)		(19	)
Effect of foreign currency translation		529			(104	)		(451	)
Balance at end of year	$	4,522		$	4,486		$	4,443