TAXES

The sources of the Company’s earnings before taxes were as follows for the years ended December 31:



	2015		2014		2013
United States	$	20,992	$	33,157	$	18,119
Non-United States	442,432		411,847		384,590
Earnings before taxes	$	463,424	$	445,004	$	402,709

The provisions for taxes consist of:



	Current		Deferred			Total
Year ended December 31, 2015:
United States federal	$	11,071	$	3,029		$	14,100
State and local	2,164		617			2,781
Non-United States	90,111		3,612			93,723
Total	$	103,346	$	7,258		$	110,604
Year ended December 31, 2014:
United States federal	$	—	$	5,676		$	5,676
State and local	1,372		527			1,899
Non-United States	92,358		6,830			99,188
Total	$	93,730	$	13,033		$	106,763
Year ended December 31, 2013:
United States federal	$	—	$	8,249		$	8,249
State and local	1,459		965			2,424
Non-United States	86,340		(398		)	85,942
Total	$	87,799	$	8,816		$	96,615

The provisions for tax expense for the years ended December 31, 2015, 2014, and 2013 differed from the amounts computed by applying the United States federal income tax rate of 35% to the earnings before taxes as a result of the following:



	2015			2014			2013
Expected tax	$	162,198		$	155,751		$	140,948
United States state and local income taxes, net of federal income tax benefit	2,551			1,899			1,167
Change in valuation allowance	(1,098		)	(172		)	1,178
Non-United States income taxes at other than a 35% rate	(54,798		)	(51,360		)	(50,041		)
Other, net	1,751			645			3,363
Total provision for taxes	$	110,604		$	106,763		$	96,615

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below at December 31:



	2015			2014
Deferred tax assets:
Inventory	$	28,973		$	27,164
Accrued and other liabilities	69,956			74,780
Accrued post-retirement benefit and pension costs	59,175			68,709
Net operating loss and tax credit carryforwards	32,818			45,806
Other	9,778			9,044
Total deferred tax assets	200,700			225,503
Less valuation allowance	(25,435		)	(36,263		)
Total deferred tax assets less valuation allowance	175,265			189,240
Deferred tax liabilities:
Inventory	3,946			3,918
Property, plant, and equipment	57,373			47,547
Rainin intangibles amortization	71,388			65,409
Prepaid post-retirement benefit and pension costs	30,884			36,548
International earnings	14,998			13,506
Other	120			5,102
Total deferred tax liabilities	178,709			172,030
Net deferred tax (liability) asset	$	(3,444	)	$	17,210

A reconciliation of the beginning and end amounts of unrecognized tax benefits is as follows:



	2015			2014
Unrecognized tax benefits at beginning of year	$	16,864		$	18,848
Increases related to current tax positions	2,676			990
Increases related to prior year tax positions	186			1,944
Decreases relating to taxing authority settlements	(1,102		)	(1,886		)
Decreases resulting from a lapse of the applicable statute of limitations	(2,764		)	(2,106		)
Other, net	$	(601	)	$	(926	)
Unrecognized tax benefits at end of year	$	15,259		$	16,864

Included in the balance of unrecognized tax benefits at December 31, 2015 and 2014 were $12.0 million and $13.6 million, respectively, of tax benefits that if recognized would reduce the Company’s effective tax rate. The Company recognizes accrued amounts of interest and penalties related to its uncertain tax positions as part of its income tax expense within its consolidated statement of operations.

The amount of accrued interest and penalties included within other non-current liabilities within the Company’s consolidated balance sheet as of December 31, 2015 and 2014 was $1.9 million and $1.6 million, respectively.

The Company believes that it is reasonably possible that the unrecognized tax benefit balance could change over the next twelve months, primarily related to potential disputes raised by the taxing authorities over income and expense recognition. The Company does not expect a change would have a material impact on its financial position, results of operations, or cash flows.

The Company has recorded valuation allowances related to certain of its deferred income tax assets due to the uncertainty of the ultimate realization of future benefits from such assets. The potential decrease or increase of the valuation allowance in the near term is dependent on the future ability of the Company to realize the deferred tax assets that are affected by the future profitability of operations in various worldwide jurisdictions. The $10.8 million decrease in the total valuation allowance during 2015 is primarily attributable to changes in the foreign tax credit carryforward and foreign currency fluctuation.

The deferred tax assets and valuation allowance as of December 31, 2015 do not include certain deferred tax assets that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation in excess of compensation expense recorded. Shareholders' equity will be increased by $66.5 million if and when such tax assets are ultimately realized.

At December 31, 2015, the Company has various U.S. state net operating losses and various foreign net operating losses that have various expiration periods.

The Company plans to repatriate earnings from China, Switzerland, Germany, the United Kingdom, and certain other countries in future years and believes that there will be no additional cost associated with the repatriation of such foreign earnings other than withholding taxes. All other undistributed earnings are considered to be permanently reinvested. As of December 31, 2015, we had an immaterial amount of cash and cash equivalents in foreign subsidiaries where undistributed earnings are considered permanently reinvested. Accordingly, we believe the tax impact associated with repatriating our undistributed foreign earnings will not have a material effect on our liquidity.

As of December 31, 2015, the major jurisdictions for which the Company is subject to examinations are Germany for years after 2012, the United States after 2012, France after 2011, Switzerland after 2011, the United Kingdom after 2013, and China after 2012. Additionally, the Company is currently under examination in various taxing jurisdictions in which it conducts business operations. While the Company has not yet received any material assessments from these taxing authorities, the Company believes that adequate amounts of taxes and related interest and penalties have been provided for any adverse adjustments as a result of these examinations and that the ultimate outcome of these examinations will not result in a material impact on the Company’s consolidated results of operations or financial position.