

	Fiscal year ended March 31,
	2017		2016			2015
Current income tax expense
Current:
Federal	$	30,362	$	29,082		$	12,299
State	4,855		4,750			3,044
Foreign	17,800		17,034			20,585
Total current income tax expense	53,017		50,866			35,928
Deferred income tax expense (benefit)
Federal	857		(3,706		)	25,113
State	590		124			1,771
Foreign	8		2,829			5,002
Total deferred income tax expense (benefit)	1,455		(753		)	31,886
Total income tax expense	$	54,472	$	50,113		$	67,814



	Fiscal year ended March 31,
	2017		2016		2015
United States	$	80,436	$	64,235	$	76,327
Foreign	132,259		117,702		173,012
Earnings before income taxes	$	212,695	$	181,937	$	249,339



	March 31,
	2017			2016
Deferred tax assets:
Accounts receivable	$	2,419		$	1,450
Inventories	6,521			6,596
Net operating loss carryforwards	46,178			50,094
Accrued expenses	29,783			25,436
Other assets	20,282			22,551
Gross deferred tax assets	105,183			106,127
Less valuation allowance	(27,053		)	(25,416		)
Total deferred tax assets	78,130			80,711
Deferred tax liabilities:
Property, plant and equipment	24,319			25,302
Other intangible assets	67,388			65,879
Other liabilities	759			2,008
Total deferred tax liabilities	92,466			93,189
Net deferred tax liabilities	$	(14,336	)	$	(12,478	)

The Company has approximately $1,797 in United States federal net operating loss carryforwards, all of which are limited by Section 382 of the Internal Revenue Code, with expirations between 2023 and 2027. The Company has approximately $151,340 of foreign net operating loss carryforwards, of which $110,506 may be carried forward indefinitely and $40,834 expire between fiscal 2018 and fiscal 2034. In addition, the Company also had approximately $33,263 of state net operating loss carryforwards with expirations between fiscal 2018 and fiscal 2037.

As of March 31, 2017 and 2016, the federal valuation allowance was $1,050. As of March 31, 2017 and 2016, the valuation allowance associated with the state tax jurisdictions was $705 and $656, respectively. As of March 31, 2017 and 2016, the valuation allowance associated with certain foreign tax jurisdictions was $25,298 and $23,710, respectively. The change includes an increase of $2,001 to tax expense primarily related to net operating loss carryforwards generated in the current year that the Company believes are not more likely than not to be realized, and a decrease of $413 primarily related to currency fluctuations.



	Fiscal year ended March 31,
	2017			2016			2015
United States statutory income tax expense (at 35%)	$	74,444		$	63,678		$	87,269
Increase (decrease) resulting from:
State income taxes, net of federal effect	3,677			3,282			3,206
Nondeductible expenses, domestic manufacturing deduction and other	1,993			(1,407		)	8,128
Legal proceedings charge - European Competition Investigations - See Note 18	7,873			668			—
Goodwill impairment - See Note 5	3,812			6,475			5,194
Effect of foreign operations	(39,377		)	(28,845		)	(37,775		)
Valuation allowance	2,050			6,262			1,792
Income tax expense	$	54,472		$	50,113		$	67,814

The effective income tax rates for the fiscal years ended March 31, 2017, 2016 and 2015 were 25.6%, 27.5% and 27.2%, respectively. The effective income tax rate with respect to any period may be volatile based on the mix of income in the tax jurisdictions in which the Company operates and the amount of its consolidated income before taxes.

In fiscal 2017, the foreign effective income tax rate on foreign pre-tax income of $132,259 was 13.5%. In fiscal 2016, the foreign effective income tax rate on foreign pre-tax income of $117,702 was 16.9% and in fiscal 2015, the foreign effective income tax rate on foreign pre-tax income of $173,012 was 14.8%. The rate decrease in fiscal 2017 compared to fiscal 2016 is primarily due to changes in the mix of earnings among tax jurisdictions and a decrease in non-deductible goodwill impairment charges compared to fiscal 2016, partially offset by an increase in non-deductible legal proceedings charge relating to the European competition investigation in fiscal 2017 compared to fiscal 2016. The rate increase in fiscal 2016 compared to fiscal 2015 is primarily due to changes in the mix of earnings among tax jurisdictions and an increase in non-deductible goodwill impairment charges compared to fiscal 2015.

Income from the Company's Swiss subsidiary comprised a substantial portion of its overall foreign mix of income for the fiscal years ended March 31, 2017, 2016 and 2015 and was taxed at approximately 5%, 7% and 7%, respectively.

The Company has not recorded United States income or foreign withholding taxes on approximately $960,000 and $878,225 of undistributed earnings of foreign subsidiaries for fiscal years 2017 and 2016, respectively, that could be subject to taxation if remitted to the United States because the Company currently plans to keep these amounts indefinitely invested overseas. It is not practical to calculate the income tax expense that would result upon repatriation of these earnings.



	Fiscal year ended March 31,
	2017			2016			2015
Balance at beginning of year	$	2,375		$	4,112		$	3,743
Increases related to current year tax positions	252			422			3,241
Increases related to prior year tax positions	31			470			9
Decreases related to prior tax positions due to foreign currency translation	(352		)	—			(85		)
Decreases related to prior year tax positions settled	(678		)	(2,315		)	(2,695		)
Lapse of statute of limitations	(178		)	(314		)	(101		)
Balance at end of year	$	1,450		$	2,375		$	4,112

All of the balance of unrecognized tax benefits at March 31, 2017, if recognized, would be included in the Company’s Consolidated Statements of Income and have a favorable impact on both the Company’s net earnings and effective tax rate.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states 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 2014.

While the net effect on total unrecognized tax benefits cannot be reasonably estimated, approximately $284 is expected to reverse in fiscal 2017 due to expiration of various statute of limitations.