Entity information:
Income Taxes
Income (loss) before income taxes consists of the following:  
 
 
Years Ended October 31,
 
 
2017
 
2016
 
2015
Domestic
 
$
4,251

 
$
3,917

 
$
17,063

Foreign
 
2,172

 
(5,400
)
 
(6,448
)
      Total
 
$
6,423

 
$
(1,483
)
 
$
10,615


The components of the provision (benefit) for income taxes from continuing operations were as follows:  
 
 
 
Years Ended October 31,
 
 
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
 
 
Federal
 
$
66

 
$
(3,900
)
 
$
(545
)
 
State and local
 
386

 
329
 
384
 
Foreign
 
2,494

 
1,123
 
608
 
 
 
 
 
 
 
 
Total current
 
2,946

 
(2,448)
 
447
Deferred:
 
 

 
 

 
 
 
Federal
 
856

 
3,289

 
4,501

 
State and local
 
(329
)
 
156

 
208

 
Foreign
 
3,647

 
(6,149
)
 
(446
)
Total deferred
 
4,174
 
(2,704)
 
4,263
 
Provision (benefit)
 
$
7,120

 
$
(5,152
)
 
$
4,710



Net deferred income tax assets (liabilities) included in the consolidated balance sheet consist of the tax effects of temporary differences related to the following:  
 
 
Years Ended October 31,
 
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Accrued compensation and benefits
$
1,793

 
$
2,091

 
Inventory
1,721

 
646
 
State depreciation adjustments and loss carryforwards
4,213

 
2,664
 
Pension obligations and post retirement benefits
7,432

 
10,229
 
Foreign net operating loss
8,851

 
7,466
 
Other accruals, reserves and tax credits
3,070

 
3,668
 
Goodwill and intangible amortization
6,269
 
7,234
 
Foreign currency translation
30
 
75

 
Interest rate swap
771
 
1,922

 Total deferred tax assets
34,150

 
35,995

Less: Valuation allowance
(9,401)

 
(2,782)
Net deferred tax assets
$
24,749

 
$
33,213

  Deferred tax liabilities:
 
 
 
 
Fixed assets
$
(26,742
)
 
$
(26,800
)
 
Prepaid expenses and other
(835)

 
(1,173)
Net deferred tax (liability) asset
$
(2,828
)
 
$
5,240

 
 
 
 
 
Change in net deferred tax asset:
 
 
 
 
Benefit (provision) for deferred taxes
$
(4,174
)
 
$
2,704

Unrecognized tax benefit adjustments
453

 
(207
)
Components of other comprehensive income:
 
 
 
 
Pension and post retirement benefits
(3,001
)
 
2,986

 
Velocys investment
(250)

 
58
 
Interest rate swap
(1,151
)
 
111

 
Other adjustments
55

 
(27
)
 
       Total change in net deferred tax asset
$
(8,068
)
 
$
5,625



As required by FASB ASC Topic 740, we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Activities and balances of unrecognized tax benefits for 2017, 2016, and 2015 are summarized below:
 
Years Ended October 31,
 
2017
 
2016
 
2015
Balance at beginning of year
$
561

 
$
731

 
$
1,068

Additions based on tax positions related to the current year
88

 
48

 
125

Additions for tax positions of prior years
9

 
—

 
27

Reductions based on tax positions related to the current year
—

 
—

 
(39
)
Reductions for tax positions of prior years
—

 
(53
)
 
—

Reductions as result of lapse of applicable statute of limitations
(118
)
 
(165
)
 
(450
)
Balance at end of year
$
540

 
$
561

 
$
731


    
The total amount of unrecognized tax benefits that, if recognized, would affect the effective rate was $355 at October 31, 2017 and $368 at October 31, 2016. We recognize interest accrued and penalties related to unrecognized tax benefits as part of income tax expense. We recognized $102 of benefit in 2017, $218 of benefit in 2016 and $163 of benefit in 2015 for interest and penalties. We had accrued $411 at October 31, 2017 and $513 at October 31, 2016 for the payment of interest and penalties.

We are subject to income taxes in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, we are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years ending prior to October 31, 2012 and no longer subject to non-U.S. income tax examinations for calendar years ending prior to December 31, 2010. We do not anticipate that within the next 12 months the total unrecognized tax benefits will significantly change due to the settlement of examinations and the expiration of statute of limitations.

During the third quarter of fiscal 2017, we established a full valuation allowance of $3,124 against deferred tax assets of the Mexican operations in Saltillo. The valuation allowance as of October 31, 2017 was $3,831.
 
A valuation allowance of $9,401 remains as of October 31, 2017 for deferred tax assets whose realization remains uncertain. The comparable amount of the valuation allowance at October 31, 2016 was $2,782. The net increase in the valuation allowance of $6,619 relates to an increase of $1,636 related to state operating loss carry forwards, an increase of $3,831 related to Mexican operating loss carry forwards and other deferred tax assets, an increase of $707 related to Netherlands operating loss carry forwards, an increase of $369 related to China operating loss carry forwards, an increase of $33 related to Hong Kong operating loss carry forwards, and an increase of $43 related to Swedish operating loss carry forwards.

We assess both negative and positive evidence when measuring the need for a valuation allowance. A valuation allowance has been established due to the uncertainty of realizing certain loss carry forwards, other deferred tax assets and foreign tax credits in the United States and various foreign jurisdictions. We believe the remaining deferred tax assets will be realizable based on projected book income, the reversals of existing taxable temporary differences and available tax planning strategies that would be implemented and generate ordinary income in the United States or foreign jurisdictions to recognize the deferred tax assets. We intend to maintain the valuation allowance against certain deferred tax assets until such time that sufficient positive evidence exists to support realization of the deferred tax assets. In the event we were to determine that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. Likewise, should we determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made.
A reconciliation of income tax expense / (benefit) from operations and the U.S. Federal statutory income tax expense were as follows:
 
Years Ended October 31,
 
2017
 
2016
 
2015
Taxes at U.S. federal statutory rate
$
2,248

 
$
(519
)
 
$
3,715

State and local income taxes, net of federal benefit
(1,639
)
 
65

 
499

Valuation allowance change
5,749

 
(5,452
)
 
1,337

Domestic tax credits
(803
)
 
(930
)
 
(223
)
Domestic production activities deduction
(455
)
 
(391
)
 
(340
)
Foreign operations
1,182

 
2,240

 
1,401

Adjustment of uncertain tax positions
(83
)
 
(173
)
 
(340
)
Provision to return adjustment for tax law extensions subsequent to year-end
285

 
202

 
(1,380
)
Other
636

 
(194
)
 
41

Total income tax expense (benefit)
$
7,120

 
$
(5,152
)
 
$
4,710


At October 31, 2017, we had operating loss carry forwards of $103,689 in Sweden, Netherlands, China, Hong Kong, Mexico and certain U.S. states. The Swedish foreign operating loss carry forward benefit is $5,898 which can be carried forward indefinitely. There is a partial valuation allowance against it, in the amount of $43, for activities related to Shiloh Industries China Holding. The foreign operating loss carry forward benefit for the Netherlands is $742 and has a full valuation allowance against it. This benefit can be carried forward for nine years. The Chinese operating loss carry forward benefit is $742 and has a full valuation allowance against it. This benefit can be carried forward for five years. The Hong Kong operating loss carry forward benefit is $85 and has a full valuation allowance against it. This benefit can be carried forward indefinitely.
In addition, we had Mexican foreign operating loss carry forwards of approximately $1,384 as of October 31, 2017, which will expire between 2019 and 2026. A full valuation allowance was established against the Mexican operating loss carry forward benefit during the year.
Domestically, we had various state net operating loss carryforward benefits. As of October 31, 2017 and 2016, we had state net operating loss carry forward benefits of $3,711 and $2,138 with a valuation allowance of $3,711 and $2,075, respectively that will expire between 2018 and 2037. The table below summarizes the various country operating losses, credit carry forwards and associated valuation allowances as of October 31, 2017 and 2016:
 
 
October 31, 2017
 
October 31, 2016
Jurisdiction
 
Gross NOL Carryforward
 
NOL Tax Effected
 
Valuation Allowance
 
Gross NOL Carryforward
 
NOL Tax Effected
 
Valuation Allowance
Netherlands
 
$
3,711

 
$
742

 
$
742

 
$
174

 
$
35

 
$
35

Sweden
 
26,811
 
5,898
 
43

 
27,271

 
6,000

 
—

China
 
2,968

 
742

 
742

 
1,494

 
373

 
373

Hong Kong
 
338

 
85

 
85

 
206

 
51

 
51

Mexico
 
4,614

 
1,384

 
1,384

 
3,358

 
1,007

 
—

U.S. (State)
 
65,247
 
3,711
 
3,711
 
39,331
 
2,138

 
2,075

Total before Foreign Tax Credit
 
$
103,689

 
$
12,562

 
$
6,707

 
$
71,834

 
$
9,604

 
$
2,534

 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Federal (Foreign Tax Credit)
 
—

 
—

 
248

 
—

 
—

 
248

Total
 
$
103,689

 
$
12,562

 
$
6,955

 
$
71,834

 
$
9,604

 
$
2,782


We paid income taxes, net of refunds, of $1,780 in 2017 and had a net income tax refund of $5,855 in 2016. U.S. income taxes and foreign withholding taxes are not provided on undistributed earnings of foreign subsidiaries because such earnings are permanently reinvested in the operations. As of October 31, 2017, there was approximately $19,282 of undistributed foreign subsidiary earnings. The income tax liability that would result had such earnings been repatriated is estimated at $6,749.
On December 22, 2017, President Trump signed U.S. tax reform legislation.  Given this date of enactment, our financial statements for the year ended October 31, 2017 do not reflect the impact of this legislation. We are currently undergoing an analysis of the tax reform law and its impact to the financial statements and tax footnote disclosures.  We are also evaluating if the tax reform law will impact the realizability of deferred tax assets and carryforwards.  A more detailed analysis will be completed in our quarterly report for the period in which the law was enacted.