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Income Taxes

The Company or its subsidiaries file income tax returns in the U.S. federal, and various states and foreign jurisdictions. 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 2011.

The Company follows the provisions of uncertain tax positions as addressed in FASB Accounting Standards Codification 740-10-65-1. The Company did not recognize any increase in the liability for unrecognized tax benefits and has no uncertain tax position at December 31, 2014. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties as a component of the provision for income taxes. No interest or penalties were recognized during the periods presented and there is no accrual for interest and penalties at December 31, 2014.

The components of income before income taxes consist of the following:

	Year ended December 31,
	2014		2013		2012
U.S. operations	$	12,712	$	11,340	$	8,904
Foreign operations		44,003		69,306		265,861

	$	56,715	$	80,646	$	274,765

The provision for current and deferred income tax expense (benefit) consists of the following:

	Year ended December 31,
	2014			2013		2012
Current:
Federal	$	4,374		$	3,638	$	2,511
State and local		323			454		558
Foreign		15,229			20,744		102,717
		19,926			24,836		105,786
Deferred:
Federal		(84	)		370		703
State and local		30			59		40
Foreign		(502	)		4,415		(8,654	)
		(556	)		4,844		(7,911	)
Total income tax expense	$	19,370		$	29,680	$	97,875

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	December 31,
	2014			2013
Deferred tax assets:
Foreign net operating loss carry-forwards	$	419		$	707
Inventory and accounts receivable		2,655			626
Profit sharing		2,570			4,805
Stock option compensation		545			526
Effect of inventory profit elimination		1,757			1,710
Other		(679	)		(410	)
Total gross deferred tax assets		7,267			7,964
Valuation allowance		(419	)		(707	)
Net deferred tax assets		6,848			7,257
Deferred tax liabilities (long-term):
Trademarks and licenses		(2,154	)		(2,555	)
Other		—			—
Total deferred tax liabilities		(2,154	)		(2,555	)
Net deferred tax assets	$	4,694		$	4,702

Valuation allowances are provided for foreign net operating loss carry-forwards, as future profitable operations from certain foreign subsidiaries might not be sufficient to realize the full amount of net operating loss carry-forwards. In 2014, as a result of a tax examination in a foreign jurisdiction, foreign net operating loss carry-forwards were reduced.

No other valuation allowances have been provided as management believes that it is more likely than not that the asset will be realized in the reduction of future taxable income.

The Company has not provided for U.S. deferred income taxes on $339 million of undistributed earnings of its non-U.S. subsidiaries as of December 31, 2014 since the Company intends to reinvest most of these earnings in its foreign operations indefinitely and the Company believes it has sufficient foreign tax credits available to offset any potential tax on amounts that have been and are planned to be repatriated.

Differences between the United States Federal statutory income tax rate and the effective income tax rate were as follows:

	Year ended December 31,
	2014			2013			2012
Statutory rates		34.0	%		34.0	%		34.0	%
State and local taxes, net of Federal benefit		0.1			0.4			0.1
Effect of foreign taxes greater than
U.S. statutory rates		0.4			2.0			1.4
Other		(0.3	)		0.4			0.1
Effective rates		34.2	%		36.8	%		35.6	%