INCOME TAXES

The components of income (loss) before taxes from continuing operations consisted of the following for the years ended December 31 (in thousands):



	2014			2013			2012
Domestic	$	(87,179	)	$	19,787		$	18,468
Foreign	2,429			(20,619		)	3,699
(Loss) income before taxes from continuing operations	$	(84,750	)	$	(832	)	$	22,167

The provision for (benefit of) income taxes from continuing operations for the years ended December 31 consisted of the following (in thousands):



	2014			2013			2012
Current:
U.S. Federal	$	1,684		$	3,635		$	5,780
State	1,265			1,507			1,483
Foreign	733			892			1,260
Total current	3,682			6,034			8,523
Deferred:
U.S. Federal	(6,373		)	2,655			844
State	(203		)	(2,847		)	489
Foreign	(64		)	(1,045		)	(339		)
Total deferred	(6,640		)	(1,237		)	994
Provision for income taxes	$	(2,958	)	$	4,797		$	9,517

The (benefit of) provision for income taxes from discontinued operations for the years ended December 31 consisted of the following (in thousands):



	2014			2013			2012
Current:
U.S. Federal	$	(18	)	$	(3	)	$	(98	)
State	(1		)	—			(186		)
Foreign	—			—			—
(Benefit of) provision for income taxes	$	(19	)	$	(3	)	$	(284	)

The provision for income taxes from continuing operations differs from the federal statutory rate of 35% for the years December 31 due to the following (in thousands):



	2014					2013					2012
Statutory rate	$	(29,664	)	35.0	%	$	(291	)	35.0	%	$	7,758		35.0	%
Intangible asset impairment	26,637			(31.4	)%	7,241			(870.3	)%	1,514			6.8	%
State taxes, less federal effect	606			(0.7	)%	1,382			(166.1	)%	1,282			5.8	%
Change in valuation allowance	94			(0.1	)%	(2,268		)	272.6	%	(39		)	(0.2	)%
Federal tax credits	(255		)	0.3	%	(517		)	62.1	%	(270		)	(1.2	)%
Uncertain tax positions	(169		)	0.2	%	(515		)	61.9	%	(872		)	(3.9	)%
Foreign rate differential	(311		)	0.4	%	(163		)	19.6	%	(335		)	(1.5	)%
Non-deductible expenses	173			(0.2	)%	(66		)	7.9	%	366			1.7	%
Other	(69		)	—	%	(6		)	0.7	%	113			0.5	%
	$	(2,958	)	3.5	%	$	4,797		(576.6	)%	$	9,517		43.0	%

Deferred tax liabilities (assets) at December 31 consist of the following (in thousands):



	2014			2013
Depreciation	$	18,896		$	19,278
Goodwill	29,175			33,982
Intangible assets	18,637			20,951
Other	1,464			1,466
Gross deferred tax liabilities	68,172			75,677
Equity compensation	(11,826		)	(12,858		)
Other	(16,988		)	(15,623		)
Gross deferred tax assets	(28,814		)	(28,481		)
Valuation allowances	400			306
Deferred tax assets, net of valuation allowances	(28,414		)	(28,175		)
Net deferred tax liabilities	$	39,758		$	47,502

Net current deferred tax assets of $10,014,000 and $7,622,000 are included in other current assets in the consolidated balance sheet at December 31, 2014 and 2013, respectively.

Deferred taxes include net deferred tax assets relating to certain state and foreign tax jurisdictions. A reduction of the carrying amount of deferred tax assets by a valuation allowance is required if it is more likely than not that such assets will not be realized. The following sets forth a reconciliation of the beginning and ending amount of the Company’s valuation allowance (in thousands):



	2014			2013			2012
Balance as of January 1	$	306		$	2,574		$	2,613
Cost charged to the tax provision	144			—			266
Reductions	(50		)	(2,268		)	(305		)
Balance as of December 31	$	400		$	306		$	2,574

The Company made net payments for income taxes, for the following amounts for the years ended December 31 (in thousands):



	2014			2013			2012
Payments made for income taxes, net	$	(6,509	)	$	(7,564	)	$	(8,944	)

Provision has not been made for U.S. taxes on $28,237,000 of undistributed earnings of foreign subsidiaries. Those earnings have been and will continue to be indefinitely reinvested. As of December 31, 2014, the Company’s foreign operations held $19,144,000 of cash that provides foreign operations with liquidity to reinvest in working capital and capital expenditures for their operations. Any excess earnings could be used to grow the Company’s foreign operations through launches of new capital projects or additional acquisitions. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable due to the complexities associated with its hypothetical calculation.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	2014			2013			2012
Balance as of January 1	$	1,694		$	2,485		$	3,687
Additions for tax positions of the current year	180			83			105
Additions for tax positions of prior years	93			—			67
Reductions for tax positions of prior years for:
Settlements and changes in judgment	(154		)	(26		)	(857		)
Lapses of applicable statute of limitations	(399		)	(848		)	(517		)
Balance as of December 31	$	1,414		$	1,694		$	2,485

The Company and its U.S. subsidiaries file a U.S. federal consolidated income tax return. Foreign and U.S. state jurisdictions have statute of limitations generally ranging from four to ten years. Currently, the Company is under examination in Germany for 2009 through 2012 and the United States for 2012 through 2013.

All unrecognized tax benefits would affect the effective tax rate, if recognized as of December 31, 2014 and 2013. The Company classifies accrued interest and penalties related to unrecognized tax benefits in income tax expense. Interest (net of federal tax benefit) and penalties recognized during the years ended December 31 were (in thousands):



	2014			2013			2012
Interest and penalties recognized as income	$	(28	)	$	(92	)	$	(48	)

At December 31, 2014, the Company had net operating loss carry forwards for federal, state, and foreign income tax purposes totaling $31,700,000 which will expire between 2015 and 2033. The Company recognized $1,796,000 of deferred tax assets, net of the federal tax benefit, related to these net operating losses prior to any valuation allowances.