13.

Income Taxes

The following table presents the provision for income taxes and the effective tax rates:

(dollars in thousands)	Three months ended March 31,
	2016				2015

Provision for income taxes		$	88			$	88
Effective tax rate			38.6	%			(22.9	)%

The Company's higher effective tax rate for 2016 compared to 2015 resulted mainly from a reduced pre-tax loss in the U.S. The Company's income tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. Tax expense in both years is comprised mainly of foreign income tax expense and deferred tax expense relating to the tax amortization of goodwill.

Because of its net operating loss carryforwards, the Company is subject to U.S. federal and state income tax examinations from the year 1997 forward. The Company is subject to foreign tax examinations by tax authorities for years 2010 forward for Sweden, 2012 forward for China, and 2014 forward for both India and the UK.

An uncertain tax position taken or expected to be taken in a tax return is recognized in the consolidated financial statements when it is more likely than not (i.e., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities that have full knowledge of all relevant information. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties related to income taxes are accounted for as income tax expense. The Company has recorded uncertain tax positions for certain foreign tax contingencies in China and the Ukraine.

In 2015, the Company paid income taxes in the UK and India and expects to do so again in 2016. The Company has a full valuation allowance on its U.S., Swedish, and Chinese net deferred tax assets at March 31, 2016.