Income Taxes

Income (loss) before income taxes and equity earnings is attributable to the following jurisdictions (in thousands):



	Year Ended December 31,
	2014		2013			2012
United States	$	178,497	$	158,851		$	144,578
Foreign ⁽¹⁾	2,888		(113		)	(6,178		)
Total	$	181,385	$	158,738		$	138,400

⁽¹⁾ The foreign loss before income taxes in 2012 includes the $6.9 million goodwill impairment charge related to the United Kingdom.

The provision for income taxes consisted of the following (in thousands):



	Year Ended December 31,
	2014		2013			2012
Current:
Federal	$	54,447	$	49,425		$	43,871
State and other	9,126		7,486			5,958
Total current provision for income taxes	63,573		56,911			49,829

Deferred:
Federal	6,942		4,905			6,071
State and other	44		(226		)	844
Total deferred provision for income taxes	6,986		4,679			6,915
Provision for income taxes	$	70,559	$	61,590		$	56,744

A reconciliation of the U.S. federal statutory tax rate to our effective tax rate on Income before income taxes and equity earnings is as follows:



	Year Ended December 31,
	2014		2013		2012
Federal statutory rate	35.00	%	35.00	%	35.00	%
Change in valuation allowance	0.43		0.57		1.97
Other, primarily state income tax rate	3.47		3.23		4.03
Total effective tax rate	38.90	%	38.80	%	41.00	%

The table below presents the components of our deferred tax assets and liabilities (in thousands):



	December 31,
	2014			2013
Deferred tax assets:
Product inventories	$	6,583		$	6,476
Accrued expenses	3,168			4,072
Allowance for doubtful accounts	172			346
Total current	9,923			10,894
Less: Valuation allowance	(1,596		)	(1,691		)
Component reclassified for net presentation	(5,210		)	(3,746		)
Total current, net	3,117			5,457

Leases	1,763			1,805
Share-based compensation	14,483			15,579
Uncertain tax positions	1,641			1,343
Net operating losses	5,494			4,709
Interest rate swaps	861			667
Equity losses in unconsolidated investments	5,653			5,653
Other	1,009			953
Total non-current	30,904			30,709
Less: Valuation allowance	(9,551		)	(8,672		)
Component reclassified for net presentation	(20,462		)	(21,253		)
Total non-current, net	891			784

Total deferred tax assets	4,008			6,241

Deferred tax liabilities:
Trade discounts on purchases	2,836			2,022
Prepaid expenses	2,374			1,724
Total current	5,210			3,746
Component reclassified for net presentation	(5,210		)	(3,746		)
Total current, net	—			—

Intangible assets, primarily goodwill	36,927			33,659
Depreciation	7,039			6,702
Total non-current	43,966			40,361
Component reclassified for net presentation	(20,462		)	(21,253		)
Total non-current, net	23,504			19,108

Total deferred tax liabilities	23,504			19,108

Net deferred tax liability	$	(19,496	)	$	(12,867	)

At December 31, 2014, certain of our international subsidiaries had tax loss carryforwards totaling approximately $19.9 million, which expire in various years after 2015. Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $5.5 million as of December 31, 2014 and $4.7 million as of December 31, 2013. We have recorded a corresponding valuation allowance of $5.5 million and $4.7 million in the respective years. We have also recorded a $5.7 million valuation allowance for our deferred tax asset related to the $14.4 million capital loss carryforward resulting from the write‑off of our investment in Latham Acquisition Corporation (LAC). Based on the more likely than not threshold, we do not believe we will generate sufficient capital gains to recognize the capital loss before its expiration on December 31, 2015.

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards. To the extent realized tax deductions exceed the amount of previously recognized deferred tax benefits related to share-based compensation, we record an excess tax benefit in stockholders’ equity. We recorded excess tax benefits of $5.5 million in 2014 and $4.6 million in 2013.

As of December 31, 2014, United States income taxes were not provided on earnings of our foreign subsidiaries, as we have invested or expect to invest the undistributed earnings indefinitely. If in the future these earnings are repatriated to the United States, or if we determine that the earnings will be remitted in the foreseeable future, additional income tax provisions may be required. Determining the amount of unrecognized deferred tax liability on these undistributed earnings is not practicable due to the complexity of tax laws and regulations and the varying circumstances, tax treatments and timing of any future repatriation.

We hold, through our affiliates, cash balances in the countries in which we operate, including amounts held outside the United States. Most of the amounts held outside the United States could be repatriated to the United States, but, under current law, may be subject to United States federal income taxes, less applicable foreign tax credits. Repatriation of some foreign balances is restricted by local laws including the imposition of withholding taxes in some jurisdictions. We have not provided for the United States federal tax liability on these amounts, and for financial statement purposes, these foreign cash balances are considered indefinitely reinvested, are not material as of December 31, 2014 and are intended to be used to fund current cash flow needs in the countries where held.

The following table summarizes the activity related to uncertain tax positions for the past three years (in thousands):



	2014		2013		2012
Balance at beginning of year	$	3,837	$	3,504	$	4,715
Increases for tax positions taken during a prior period	—		—		—
Increases for tax positions taken during the current period	1,664		1,140		972
Decreases resulting from the expiration of the statute of limitations	811		807		2,123
Decreases relating to settlements	—		—		60
Balance at end of year	$	4,690	$	3,837	$	3,504

The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $3.0 million at December 31, 2014 and $2.5 million at December 31, 2013.

We record interest expense related to unrecognized tax benefits in interest expense, while we record related penalties in selling and administrative expenses. For unrecognized tax benefits, we had minimal interest expense in 2014 and interest income of $0.2 million in 2013 and $0.3 million in 2012. Accrued interest related to unrecognized tax benefits was approximately $0.4 million at December 31, 2014 and $0.4 million at December 31, 2013.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2011.