Entity information:
11.    Income Taxes
 
Income (loss) before income taxes was:
For the Years Ended June 30
    
2017
    
2016
    
2015
  
Domestic
       $ 18,015         $ 2,027         $ 15,937    
Foreign
         62,528           74,734           62,826    
Income (loss) before income taxes
       $ 80,543         $ 76,761         $ 78,763    
 
Components of the provision for income taxes were:
For the Years Ended June 30
    
2017
    
2016
    
2015
  
Current provision (benefit):        
Federal
       $ 383         $ (2,889)         $ (468)    
State and local
         724           (474)           (48)    
Foreign
         14,839           20,168           13,868    
Total current provision
         15,946           16,805           13,352    
Deferred provision (benefit):        
Federal
         4,675           (2,985)           6,157    
State and local
         251           911           1,311    
Foreign
         (833)           (989)           5,933    
Change in valuation allowance–domestic
         —           (19,588)           (7,468)    
Change in valuation allowance–foreign
         (4,111)           (121)           (802)    
Total deferred provision
         (18)           (22,772)           5,131    
Provision (benefit) for income taxes
       $ 15,928         $ (5,967)         $ 18,483    
 
During 2017, based on continued profitability, we concluded that it was more likely than not that the value of certain foreign deferred tax assets would be realized, and it was no longer necessary to maintain a related valuation allowance. Accordingly, we released the valuation allowance related to these foreign deferred tax assets. We review the realizability of our deferred tax assets when circumstances indicate a review is required.
Reconciliations of the federal statutory rate to the Company’s effective tax rate were:
For the Years Ended June 30
    
2017
    
2016
    
2015
  
Federal income tax rate
         35.0%           35.0%           35.0%    
State and local taxes, net of federal benefit
         0.9           0.2           0.2    
Change in federal valuation allowance
         —           (27.8)           (7.8)    
Change in foreign valuation allowance
         (5.1)           —           —    
Foreign income tax rates
         (6.8)           (5.5)           (2.2)    
Foreign withholding tax
         0.1           0.1           0.3    
Foreign incentive tax rates
         (3.1)           (4.5)           (4.1)    
Domestic tax on foreign income
         2.7           2.7           0.9    
Change in liability for uncertain tax positions
         1.6           (4.9)           1.5    
Permanent items
         (0.9)           1.5           (0.6)    
Exercise of employee stock options
         (3.8)           (4.6)           —    
Other
         (0.8)           —           0.3    
Effective tax rate
         19.8%           (7.8)%           23.5%    
 
We have not provided for United States or additional foreign taxes on approximately $211,631 of undistributed earnings of foreign subsidiaries, which earnings have been or are intended to be indefinitely reinvested. It is not practicable at this time to determine the amount of income tax liability that would result should such earnings be repatriated. Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
The tax effects of significant temporary differences that comprise deferred tax assets and liabilities were:
As of June 30
    
2017
    
2016
  
Deferred tax assets:      
Employee related accruals
       $ 7,146         $ 12,603    
Inventory
         4,851           2,573    
Environmental remediation
         2,280           2,208    
Net operating loss carry forwards–domestic
         4,893           13,768    
Net operating loss carry forwards–foreign
         4,023           4,346    
Other
         11,139           7,566    
          34,332           43,064    
Valuation allowance
         (438)           (4,614)    
          33,894           38,450    
Deferred tax liabilities:      
Property, plant and equipment and intangible assets
         (9,671)           (9,725)    
Other
         (2,004)           (1,956)    
          (11,675)           (11,681)    
Net deferred tax asset
       $ 22,219         $ 26,769    
 
Deferred taxes are included in the consolidated balance sheets as follows:
As of June 30
    
2017
    
2016
  
Other assets
       $ 23,269         $ 28,019    
Other liabilities
         (1,050)           (1,250)    
        $  22,219         $  26,769    
 
The valuation allowances for deferred tax assets were:
As of June 30
    
2017
    
2016
    
2015
  
Balance at beginning of period
       $ 4,614         $ 26,622         $ 32,892    
Provision for income taxes
         (4,111)           (19,709)           (6,270)    
Net operating loss utilization
         (65)           (2,299)           —    
Balance at end of period
       $ 438         $ 4,614         $ 26,622    
 
The valuation allowance for deferred tax assets as of June 30, 2017, is solely related to foreign jurisdictions.
The Company has approximately $9,191 of domestic federal net operating loss carry forwards that expire in 2028 through 2036 and approximately $32,555 of state net operating loss carry forwards that will expire in 2017 through 2036. In addition, the Company has approximately $11,915 of foreign net operating loss carry forwards, most of which are in jurisdictions that have no expiration.
As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon examination. Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. Substantially all of these unrecognized tax benefits, if recognized, would benefit our effective income tax rate. The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
As of June 30
    
2017
    
2016
    
2015
  
Unrecognized tax benefits–beginning of period
       $ 4,946         $ 8,078         $ 7,420    
Tax position changes–prior periods
         —           188           (24)    
Tax position changes–current period
         1,490           472           1,945    
Lapse of statute of limitations
         (391)           (3,700)           (907)    
Translation
         508           (92)           (356)    
Unrecognized tax benefits–end of period
         6,553           4,946           8,078    
Interest and penalties–end of period
         449           308           1,326    
Total liabilities related to uncertain tax 
positions
       $ 7,002         $ 5,254         $ 9,404    
 
We recognize interest and penalties associated with uncertain tax positions as a component of the provision for income taxes. We recognized interest and penalties expense (income) of $116, $(980) and $66 for 2017, 2016 and 2015, respectively.
During 2018, we potentially will reverse $300 of uncertain tax positions as a result of the lapse of the statute of limitations, with a corresponding benefit to the provision for income taxes.
One of our international subsidiaries is undergoing an income tax examination for the years 2013 and 2014. The examination is ongoing and is expected to be completed during 2018. We are unable to determine the effect, if any, of the results of the examination on the provision for income taxes.
Income tax returns for the following periods are no longer subject to examination by the relevant tax authorities:
•       U.S. federal and significant states, through June 30, 2007;
 
•       Brazil, through December 31, 2011;
 
•       Israel, through June 30, 2012 for certain subsidiaries and through June 30, 2013 for certain subsidiaries.