14. INCOME TAXES:

The components of income tax expense for continuing operations are as follows:


	Year Ended December 31,
	2014			2013			2012
	(in thousands)
Current:
Federal	$	4,336		$	9,097		$	8,409
State		334			690			278

Total current tax expense		4,670			9,787			8,687

Deferred:
Federal		305			2,631			(416	)
State		(324	)		(60	)		117

Total deferred tax expense (benefit)		(19	)		2,571			(299	)

	$	4,651		$	12,358		$	8,388

The difference between the Company’s effective income tax rates and the statutory United States federal income tax rate of 35% is explained as follows:


	Year Ended December 31,
	2014			2013			2012
	(in thousands)
Provision (benefit) at statutory rate of 35%	$	(532	)	$	11,921		$	9,083
State provision, net of federal benefit		(96	)		370			601
Federal and state tax credits		(91	)		(525	)		(379	)
Domestic manufacturing deduction		—			(641	)		(762	)
Change in valuation allowance		9			954			—
Uncertain tax positions		5			(7	)		(67	)
Goodwill impairment (nondeductible)		5,623			—			—
Nondeductible expenses		207			345			247
Nontaxable adjustment to contingent consideration		(611	)		—			—
Other		137			(59	)		(335	)

	$	4,651		$	12,358		$	8,388

Effective tax rate		305.6	%		36.3	%		32.4	%

The tax effect of temporary differences that give rise to significant portions of deferred tax assets and liabilities is presented below:


	December 31,
	2014			2013
	(in thousands)
Current deferred tax assets:
Costs and estimated earnings in excess of billings on uncompleted contracts, net	$	2,186		$	2,384
Accrued employee benefits		841			951
Inventories		1,937			2,671
Trade receivable, net		372			319
Net operating loss carryforwards		93			500
Other		1,299			520

		6,728			7,345
Valuation allowance		(719	)		(500	)

		6,009			6,845
Current deferred tax liabilities:
Prepaid expenses		(522	)		(637	)

Current deferred tax assets, net		5,487			6,208

Noncurrent deferred tax assets:
Net operating loss carryforwards		489			211
Tax credit carryforwards		996			478
Accrued employee benefits		4,483			3,740
Other assets		6,067			5,520
Other		142			138

		12,177			10,087
Valuation allowance		(1,139	)		(1,394	)

		11,038			8,693
Noncurrent deferred tax liabilities:
Property and equipment		(23,903	)		(19,343	)
Intangible assets		(1,150	)		(1,192	)

Noncurrent deferred tax liabilities, net		(14,015	)		(11,842	)

Net deferred tax liabilities	$	(8,528	)	$	(5,634	)

As of December 31, 2014, the Company had approximately $20 million of state net operating loss carryforwards which expire on various dates between 2018 and 2031. The Company also had state tax carryforwards of $1.5 million, which begin to expire in 2015.

The Company considers the earnings of the Mexican subsidiary to be indefinitely reinvested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Should the Company decide to repatriate the foreign earnings, the income tax provision would be adjusted in the period it is determined that the earnings will no longer be indefinitely reinvested outside the United States, and a deferred tax liability of approximately $0.9 million related to the United States federal and state income taxes and foreign withholding taxes on approximately $2.5 million of undistributed foreign earnings would be recorded.

The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions, and in many state jurisdictions. Internal Revenue Service examinations have been completed for years prior to 2011. With few exceptions, the Company is no longer subject to United States Federal or state income tax examinations for years before 2010.

A summary of the changes in the unrecognized tax benefits during the years ended December 31, 2014, 2013 and 2012 is presented below (in thousands):


	2014			2013			2012
Unrecognized tax benefits, beginning of year	$	6,207		$	5,245		$	309
Decreases for settlements		(3,265	)		—			—
Decreases for lapse in statute of limitations		(115	)		—			—
Decreases for positions taken in current year		(615	)		—			—
Increases for positions taken in prior years		101			646			3,571
Decreases for positions taken in prior years		—			(696	)		(184	)
Increases for positions taken in the current year		—			1,012			1,549

Unrecognized tax benefits, end of year	$	2,313		$	6,207		$	5,245

The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will change in the following twelve months; however, actual results could differ from those currently expected. Of the balance of unrecognized tax benefits, $2.4 million, which includes interest, would affect the Company’s effective tax rate if recognized at some point in the future.

The Company recognizes interest and penalties related to uncertain tax positions in Income tax expense. As of December 31, 2014 and 2013, the Company has approximately $0.1 million and $0.3 million, respectively, of accrued interest related to uncertain tax positions. Total interest for uncertain tax positions decreased by approximately $0.1 million in 2014, and increased by approximately $0.1 million in 2013 and 2012.