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INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before income taxes for the three years ended December 31, 2016 were as follows:
|  | Year Ended December 31,
|  | 2016 |  | 2015 |  | 2014
U.S. |  | $ | 209,409 |  |  | $ | 118,037 |  |  | $ | 303,933 |
Non-U.S. |  | 67,979 |  |  | 51,750 |  |  | 71,880 |
Total |  | $ | 277,388 |  |  | $ | 169,787 |  |  | $ | 375,813 |
The components of income tax expense (benefit) for the three years ended December 31, 2016 were as follows:
|  | Year Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Current: |  |  |  |  |  |
Federal |  | $ | 57,090 |  |  | $ | 60,500 |  |  | $ | 71,601 |
Non-U.S. |  | 23,344 |  |  | 28,046 |  |  | 24,210 |
State and local |  | 8,386 |  |  | 9,557 |  |  | 8,235 |
|  | 88,820 |  |  | 98,103 |  |  | 104,046 |
Deferred: |  |  |  |  |  |
Federal |  | (1,716 | ) |  | (47,902 | ) |  | 15,175 |
Non-U.S. |  | (8,261 | ) |  | (3,362 | ) |  | 1,370 |
State and local |  | 172 |  |  | (4,464 | ) |  | 1,342 |
|  | (9,805 | ) |  | (55,728 | ) |  | 17,887 |
Total |  | $ | 79,015 |  |  | $ | 42,375 |  |  | $ | 121,933 |
The differences between total income tax expense and the amount computed by applying the statutory federal income tax rate to income before income taxes for the three years ended December 31, 2016 were as follows:
|  | Year Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Statutory rate of 35% applied to pre-tax income |  | $ | 97,086 |  |  | $ | 59,426 |  |  | $ | 131,534 |
Effect of state and local income taxes, net of federal tax benefit |  | 5,554 |  |  | 1,868 |  |  | 6,694 |
Intangible and asset impairments/(write-off) |  | (4,438 | ) |  | 2,184 |  |  | 11,674 |
Foreign rate variance |  | (8,128 | ) |  | (11,399 | ) |  | (22,495 | )
Venezuela deconsolidation/devaluation |  | 5,192 |  |  | 11,396 |  |  | 5,603 |
Increase/(decrease) of valuation allowances |  | (8,525 | ) |  | 2,900 |  |  | 5,545 |
Manufacturing deduction |  | (5,190 | ) |  | (9,207 | ) |  | (7,316 | )
U.S. tax cost (benefit) of foreign source income |  | (489 | ) |  | (8,754 | ) |  | (514 | )
Other |  | (2,047 | ) |  | (6,039 | ) |  | (8,792 | )
Total |  | $ | 79,015 |  |  | $ | 42,375 |  |  | $ | 121,933 |
Effective tax rate |  | 28.5 | % |  | 25.0 | % |  | 32.4 | %
The 2016 effective tax rate is impacted by the utilization of U.S. tax credits, income earned in lower tax rate jurisdictions, the reversal of an income tax valuation allowance as a result of a legal entity change and an income tax benefit related to a worthless stock deduction of a foreign subsidiary. Total income tax payments, net of refunds, were $72,965 in 2016, $101,939 in 2015 and $119,102 in 2014. Deferred Taxes Significant components of deferred tax assets and liabilities at December 31, 2016 and 2015, were as follows:
|  | December 31,
|  | 2016 |  | 2015
Deferred tax assets: |  |  |  |
Tax loss and credit carry-forwards |  | $ | 52,270 |  |  | $ | 44,925 |
Inventory |  | 2,080 |  |  | 1,607 |
Other accruals |  | 18,186 |  |  | 17,874 |
Employee benefits |  | 23,596 |  |  | 21,859 |
Pension obligations |  | 2,503 |  |  | 2,477 |
Other |  | 3,020 |  |  | 3,795 |
Deferred tax assets, gross |  | 101,655 |  |  | 92,537 |
Valuation allowance |  | (47,849 | ) |  | (51,294 | )
Deferred tax assets, net |  | 53,806 |  |  | 41,243 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | 32,210 |  |  | 33,627 |
Intangible assets |  | 17,506 |  |  | 16,105 |
Inventory |  | 10,059 |  |  | 10,770 |
Pension obligations |  | 17,915 |  |  | 9,897 |
Other |  | 9,309 |  |  | 8,800 |
Deferred tax liabilities |  | 86,999 |  |  | 79,199 |
Total deferred taxes |  | $ | (33,193 | ) |  | $ | (37,956 | )
At December 31, 2016, certain subsidiaries had foreign tax credit carry-forwards of approximately $3,186 that expire in 2026, tax loss carry-forwards of approximately $87,519 that expire in various years from 2017 through 2032, plus $103,528 for which there is no expiration date. In assessing the realizability of deferred tax assets, the Company assesses whether it is more likely than not that a portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2016, a valuation allowance of $47,849 was recorded against certain deferred tax assets based on this assessment. The Company believes it is more likely than not that the tax benefit of the remaining net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company's assessment of future taxable income or tax planning strategies changes. The Company does not provide deferred income taxes on unremitted earnings of certain non-U.S. subsidiaries which are deemed indefinitely reinvested. It is not practicable to calculate the deferred taxes associated with the remittance of these earnings. Deferred income taxes associated with earnings that are not expected to be indefinitely reinvested were not significant. Unrecognized Tax Benefits Liabilities for unrecognized tax benefits are classified as Other liabilities unless expected to be paid in one year, with a portion recorded to Deferred income taxes to offset tax attributes. The Company recognizes interest and penalties related to unrecognized tax benefits in Income taxes. Current income tax expense included expense of $597 for the year ended December 31, 2016 and income of $940 for the year ended December 31, 2015 for interest and penalties. For those same years, the Company's accrual for interest and penalties related to unrecognized tax benefits totaled $6,431 and $6,080, respectively. The following table summarizes the activity related to unrecognized tax benefits:
|  | 2016 |  | 2015
Balance at beginning of year |  | $ | 14,332 |  |  | $ | 18,389 |
Increase related to current year tax provisions |  | 1,975 |  |  | 1,021 |
Increase (decrease) related to prior years' tax positions |  | 5,188 |  |  | 317 |
Decrease related to settlements with taxing authorities |  | (265 | ) |  | (157 | )
Resolution of and other decreases in prior years' tax liabilities |  | (1,982 | ) |  | (3,323 | )
Other |  | (749 | ) |  | (1,915 | )
Balance at end of year |  | $ | 18,499 |  |  | $ | 14,332 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $9,813 at December 31, 2016 and $8,369 at December 31, 2015. The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2012. The Company is currently subject to various U.S. state audits and non-U.S. income tax audits. The Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an audit. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained. Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including progress of tax audits and closing of statutes of limitations. Based on information currently available, management believes that additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax benefits. It is reasonably possible there could be a further reduction of $2,058 in prior years' unrecognized tax benefits in 2017. In July 2012, the Company received a Notice of Reassessment (the "Reassessments") from the Canada Revenue Agency in respect to its 2004 to 2010 taxation years to disallow the deductibility of inter-company dividends. The Company appealed the Reassessments to the Tax Court of Canada. In September 2014, the Department of Justice Canada consented to a judgment, wholly in the Company's favor. In vacating the reassessment, this tax litigation is concluded. The Company received a partial refund of a cash deposit in December 2014, with substantially all of the remaining cash deposit received in the first quarter of 2015, including interest.

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