Income Taxes

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



	Year Ended December 31,
	2016		2015		2014
United States	$	234,646	$	203,269	$	178,497
Foreign	6,732		4,881		2,888
Total	$	241,378	$	208,150	$	181,385

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



	Year Ended December 31,
	2016			2015			2014
Current:
Federal	$	77,000		$	65,676		$	54,447
State and other	12,182			10,263			9,126
Total current provision for income taxes	89,182			75,939			63,573

Deferred:
Federal	4,079			4,568			6,942
State and other	(330		)	(370		)	44
Total deferred provision for income taxes	3,749			4,198			6,986
Provision for income taxes	$	92,931		$	80,137		$	70,559

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,
	2016		2015		2014
Federal statutory rate	35.00	%	35.00	%	35.00	%
Change in valuation allowance	0.10		0.20		0.43
Other, primarily state income tax rate	3.40		3.30		3.47
Total effective tax rate	38.50	%	38.50	%	38.90	%

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



	December 31,
	2016			2015
Deferred tax assets:
Product inventories	$	7,010		$	7,101
Accrued expenses	3,978			3,303
Allowance for doubtful accounts	396			606
Total current	11,384			11,010
Component reclassified for net presentation	(5,368		)	(5,480		)
Total current, net	6,016			5,530

Leases	1,920			1,786
Share-based compensation	13,778			13,422
Uncertain tax positions	2,746			2,092
Net operating losses	5,735			5,485
Interest rate swaps	674			1,513
Other	2,465			1,159
Total non-current	27,318			25,457
Less: Valuation allowance	(5,735		)	(5,485		)
Component reclassified for net presentation	(20,781		)	(18,755		)
Total non-current, net	802			1,217

Total deferred tax assets	6,818			6,747

Deferred tax liabilities:
Trade discounts on purchases	2,698			3,001
Prepaid expenses	2,670			2,479
Total current	5,368			5,480
Component reclassified for net presentation	(5,368		)	(5,480		)
Total current, net	—			—

Intangible assets, primarily goodwill	42,930			40,197
Depreciation	12,326			8,366
Total non-current	55,256			48,563
Component reclassified for net presentation	(20,781		)	(18,755		)
Total non-current, net	34,475			29,808

Total deferred tax liabilities	34,475			29,808

Net deferred tax liability	$	27,657		$	23,061

At December 31, 2016, certain of our international subsidiaries had tax loss carryforwards totaling approximately $22.2 million, which expire in various years after 2017. Deferred tax assets related to the tax loss carryforwards of these international subsidiaries were $5.7 million as of December 31, 2016 and $5.5 million as of December 31, 2015. We have recorded a corresponding valuation allowance of $5.7 million and $5.5 million in the respective years.

Upon adoption of ASU 2015-17, Balance Sheet Classification of Deferred Taxes, we will classify all deferred tax assets and liabilities as noncurrent on the balance sheet rather than separately presenting net deferred tax assets or liabilities as current or noncurrent. Also, we will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances will also be required to be classified as noncurrent. ASU 2015-17 will be effective for annual periods beginning after December 15, 2016, which for us will be in the period beginning January 1, 2017. We do not expect the adoption of ASU 2015-17 will have an impact on our results of operations, but it will change the presentation of our financial position and disclosures related to deferred tax assets and liabilities.

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 $7.4 million in 2016 and $7.7 million in 2015. Upon adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, we will be required to record all excess tax benefits or deficiencies as income tax benefit or expense in the income statement. The adoption of this guidance will likely have a material positive impact on our income tax provision in periods in which employees elect to exercise their vested stock options or restrictions on share-based awards lapse. ASU 2016-09 will be effective for annual periods beginning after December 15, 2016, which for us will be in the period beginning January 1, 2017.

As of December 31, 2016, 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 as of December 31, 2016 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):



	2016		2015		2014
Balance at beginning of year	$	5,978	$	4,690	$	3,837
Increases for tax positions taken during a prior period	10		410		—
Increases for tax positions taken during the current period	2,819		1,782		1,664
Decreases resulting from the expiration of the statute of limitations	961		904		811
Decreases relating to settlements	—		—		—
Balance at end of year	$	7,846	$	5,978	$	4,690

The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate was $5.1 million at December 31, 2016 and $3.9 million at December 31, 2015.

We record interest expense related to unrecognized tax benefits in Interest and other non-operating expenses, net, while we record related penalties in Selling and administrative expenses on our Consolidated Statements of Income. For unrecognized tax benefits, we had interest expense of $0.2 million in 2016, interest expense $0.1 million in 2015 and minimal interest expense in 2014. Accrued interest related to unrecognized tax benefits was approximately $0.7 million at December 31, 2016 and $0.5 million at December 31, 2015.

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 2013.