6.	Income Taxes

Income before income taxes by source consists of the following amounts:


	Year ended May 31
(in thousands)	2016		2015		2014
U.S.	$	50,662	$	45,156	$	37,568
Foreign		4,851		6,920		5,463

	$	55,513	$	52,076	$	43,031

The provision for income taxes consisted of the following:


	Year ended May 31
(in thousands)	2016		2015		2014
Current:
U.S. Taxes	$	14,630	$	15,269	$	14,442
Foreign		1,756		1,364		1,100
Deferred		2,589		1,867		(542	)

	$	18,975	$	18,500	$	15,000

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


	Year ended May 31
(in thousands)	2016			2015			2014
Tax at U.S. statutory rates	$	19,429		$	18,227		$	15,061
Section 199 domestic production deduction		(1,143	)		(1,067	)		(821	)
Foreign rate differential		(699	)		(949	)		(726	)
Subpart F income		1,049			1,396			1,143
Tax credits and other		337			39			(170	)
Provisions for state income taxes, net of federal benefit		779			854			513
Amended U.S. Federal tax returns, FY12, FY13 & FY14		(777	)		0			0

	$	18,975		$	18,500		$	15,000

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax liabilities and assets are as follows:


	May 31
(in thousands)	2016			2015
Deferred income tax liabilities
Indefinite and long-lived assets	$	(19,296	)	$	(15,906	)
Prepaid expenses		(824	)		(431	)
Brazil valuation allowance		(542	)		(542	)

		(20,662	)		(16,879	)
Deferred income tax assets
Stock options		2,786			2,234
Inventories and accounts receivable		2,076			1,809
Tax loss carryforwards		813			542
Accrued expenses and other		229			574

		5,904			5,159

Net deferred income tax liabilities	$	(14,758	)	$	(11,720	)

The Company had no accrual for unrecognized tax benefits at both May 31, 2016 and 2015. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, such accruals will be reflected within income tax accounts. The Company is no longer subject to U.S. Federal income tax examinations by tax authorities for fiscal years before 2011.