Note 9. Income Taxes

Reliance and its subsidiaries file numerous consolidated and separate income tax returns in the United States federal jurisdiction and in many state and foreign jurisdictions. We are no longer subject to U.S. federal tax examinations for years before 2013 and state and local tax examinations before 2012.

Significant components of the provision for income taxes attributable to continuing operations were as follows:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
Current:
Federal	$	91.1	$	129.5	$	153.2
State		18.9		21.3		25.2
Foreign		10.6		8.8		9.8
		120.6		159.6		188.2
Deferred:
Federal		3.0		(11.7)		(18.7)
State		1.0		(4.5)		(2.2)
Foreign		(4.5)		(0.9)		2.7
		(0.5)		(17.1)		(18.2)
	$	120.1	$	142.5	$	170.0

Components of U.S. and international income before income taxes were as follows:


	Year Ended December 31,
	2016		2015		2014
	(in millions)

U.S.	$	411.0	$	427.3	$	488.5
International		18.2		31.4		57.8
Income before income taxes	$	429.2	$	458.7	$	546.3

The reconciliation of income tax at the U.S. federal statutory tax rates to income tax expense is as follows:


	Year Ended December 31,
	2016		2015		2014

Income tax at U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal tax effect	3.1		2.0		2.6
Foreign earnings taxed at lower rates	(0.8)		(0.8)		(1.9)
Net effect of life insurance policies	(4.2)		(3.6)		(2.6)
Net effect of changes in unrecognized tax benefits	(4.3)		0.7		0.2
Domestic production activity deduction	(1.7)		(2.0)		(1.7)
Other, net	0.9		(0.2)		(0.5)
Effective tax rate	28.0	%	31.1	%	31.1	%

Significant components of our deferred tax assets and liabilities are as follows:


	December 31,
	2016		2015
	(in millions)
Deferred tax assets:
Accrued expenses not currently deductible for tax	$	77.6	$	75.0
Inventory costs capitalized for tax purposes		29.2		27.1
Stock-based compensation		12.0		17.1
Allowance for doubtful accounts		5.3		5.5
Tax credits carryforwards		1.3		1.1
Net operating loss carryforwards		4.7		5.4
Total deferred tax assets		130.1		131.2
Deferred tax liabilities:
Property, plant and equipment, net		(238.6)		(245.5)
Goodwill and other intangible assets		(451.2)		(458.2)
LIFO inventories		(54.1)		(34.0)
Deferred income		(7.1)		(13.4)
Other		(6.0)		(7.2)
Total deferred tax liabilities		(757.0)		(758.3)
Net deferred tax liabilities	$	(626.9)	$	(627.1)

As of December 31, 2016, we had available state net operating loss carryforwards (“NOL”) of $6.3 million to offset future income taxes expiring in years 2017 through 2036. We believe that it is more likely than not that we will be able to realize these NOL’s within their respective carryforward periods.

The Company believes it is more likely than not that it will generate sufficient future taxable income to realize its deferred tax assets.

Taxes on Foreign Income

Unremitted earnings of foreign subsidiaries on which no U.S. taxes have been provided were $209.3 million as of December 31, 2016. Our intention is to indefinitely reinvest these earnings outside the United States. It is not practicable to estimate the amount of additional taxes that would be payable upon repatriation of foreign earnings.

Unrecognized Tax Benefits

We are under audit by various state jurisdictions but do not anticipate any material adjustments from these examinations. Reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
Unrecognized tax benefits at January 1	$	22.9	$	20.2	$	19.4
Increases in tax positions for prior years		0.4		0.3		0.3
Decreases in tax positions for prior years		(0.6)		(1.7)		(0.4)
Increases in tax positions for current year		0.1		4.2		3.8
Settlements		(17.6)		(0.1)		(0.1)
Lapses in statutes-of-limitation periods		—		—		(2.8)
Unrecognized tax benefits at December 31	$	5.2	$	22.9	$	20.2

As of December 31, 2016, $5.2 million of unrecognized tax benefits would impact the effective tax rate if recognized. Accrued interest and penalties, net of applicable tax effect, related to uncertain tax positions were $0.7 million and $1.3 million as of December 31, 2016 and 2015, respectively.