Entity information:
Income Taxes
Pre-tax income (loss) consisted of the following for the years ended December 31:
 
2017
 
2016
 
2015
Domestic
$
(2,093
)
 
$
(13,928
)
 
$
16,819

Foreign
15,738

 
20,762

 
—

Total
$
13,645

 
$
6,834

 
$
16,819


A reconciliation of income taxes computed at the statutory rates to the reported income tax provision for the years ended December 31 follows:
 
2017
 
2016
 
2015
Federal provision at statutory rate
$
4,776

 
$
2,392

 
$
5,887

U.S./Foreign tax rate differential
(919
)
 
(1,842
)
 
1

Foreign non-deductible expenses
(2,006
)
 
743

 
(479
)
Foreign tax provision
615

 
336

 
296

State taxes, net of federal benefit
73

 
(171
)
 
556

State tax rate change, net of federal benefit
(264
)
 
541

 
32

Change in uncertain tax positions
81

 
114

 
236

Change in valuation allowance
2,475

 
(1,858
)
 
3,283

Tax credits
(152
)
 
(104
)
 
(283
)
Share-based compensation
(657
)
 
(108
)
 
459

Change in U.S. corporate tax rate
7,214

 
—

 
—

Repatriation of foreign earnings
3,964

 
—

 
—

Other
150

 
6

 
(230
)
Provision for income taxes
$
15,350

 
$
49

 
$
9,758


The provision (benefit) for income taxes for the years ended December 31 follows:
 
2017
 
2016
 
2015
 
Current
 
Deferred
 
Total
 
Current
 
Deferred
 
Total
 
Current
 
Deferred
 
Total
Federal
$
2,954

 
$
7,716

 
$
10,670

 
$
(4
)
 
$
(1,801
)
 
$
(1,805
)
 
$
(153
)
 
$
6,077

 
$
5,924

State and local
362

 
(371
)
 
(9
)
 
(27
)
 
1,021

 
994

 
380

 
389

 
769

Foreign
4,042

 
647

 
4,689

 
2,605

 
(1,745
)
 
860

 
1,374

 
1,691

 
3,065

Total
$
7,358

 
$
7,992

 
$
15,350

 
$
2,574

 
$
(2,525
)
 
$
49

 
$
1,601

 
$
8,157

 
$
9,758


A summary of deferred income tax assets and liabilities as of December 31 follows:
 
2017
 
2016
Noncurrent deferred tax assets:
 
 
 
Amortization and fixed assets
$
1,835

 
$
4,109

Accounts receivable
396

 
815

Inventories
2,254

 
2,899

Pension obligations
2,903

 
4,623

Warranty obligations
973

 
2,519

Accrued benefits
787

 
1,060

Foreign exchange contracts
89

 
460

Restricted stock
73

 
145

Tax credits carryforwards
1,611

 
2,238

Net operating loss carryforwards
24,784

 
20,130

Other temporary differences not currently available for tax purposes
(411
)
 
2,135

Total noncurrent deferred tax assets
$
35,294

 
$
41,133

Valuation allowance
(15,021
)
 
(12,546
)
Net noncurrent deferred tax assets
$
20,273

 
$
28,587

Noncurrent deferred tax liabilities:
 
 
 
Amortization and fixed assets
$
(100
)
 
$
(764
)
Net operating loss carryforwards
—

 
2,178

Other temporary differences not currently available for tax purposes
60

 
(1,430
)
Total noncurrent tax liabilities
(40
)
 
(16
)
Total net deferred tax asset
$
20,233

 
$
28,571


Our overall deferred tax position was a net deferred tax asset of $20.2 million. The $8.3 million change in our net deferred tax asset position includes a $7.2 million reduction attributable to the decrease in U.S. corporate tax rate from 35% to 21% effective January 1, 2018. Staff Accounting Bulletin ("SAB") 118 addresses the accounting implications of the U.S Tax Reform. Under SAB 118, the assessment of the $7.2 million remeasurement of our net deferred tax asset position is complete.
The U.S. Tax Reform gave rise to a provision of $4.0 million on the deemed repatriation of accumulated untaxed earnings of foreign subsidiaries. Under SAB 118, the assessment of the $4.0 million of accumulated untaxed earnings of foreign subsidiaries is reasonably estimated. The measurement period to finalize our calculations cannot extend beyond one year of the enactment date. Any adjustments recorded to the provisional amounts will be included in income from operations as an adjustment to tax expense in the period the amounts are determined.
We assess whether valuation allowances should be established against deferred tax assets based on consideration of all available evidence using a “more likely than not” standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with unused tax attributes expiring and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified.
During 2017, we recorded additional valuation allowances of $2.3 million in certain foreign affiliates, notably Luxembourg and United Kingdom, due to pre-tax losses or a decrease in earnings in the current year. We increased a valuation allowance of $0.2 million for deferred assets associated with certain U.S. state tax net operating loss carry forwards. We expect to be able to realize the benefits of all of our deferred tax assets that are not currently offset by a valuation allowance, as discussed above. In the event that our actual results differ from our estimates or we adjust these estimates in future periods, the effects of these adjustments could materially impact our financial position and results of operations.
As of December 31, 2017, we had $71.5 million of foreign, $24.0 million of U.S. federal and $65.6 million of U.S. state net operating loss carryforwards available to offset future taxable income. Utilization of these losses is subject to the tax laws of the applicable tax jurisdiction and may be limited by the ability of certain subsidiaries to generate taxable income in the associated tax jurisdiction. Generally, our net operating loss carryforwards continue through 2037. Although some of our net operating loss carryforwards expire beginning in 2018, there are certain tax jurisdictions with no expiration dates. We have established valuation allowances for all net operating losses that we believe are more likely than not to expire before they can be utilized.
As of December 31, 2017, we had $1.6 million of research and development tax credits being carried forward related to our U.S. operations. Utilization of these credits may be limited by the ability to generate federal taxable income in future years; the credits will expire between 2026 and 2038.
As of December 31, 2017, cash of $38.2 million was held by foreign subsidiaries. We do not have any plans to repatriate the earnings held by our foreign affiliates and consider these earnings to be indefinitely reinvested. Rather, we intend to use the cash to fund the growth of our foreign operations. Should our plans change with respect to cash held by our foreign subsidiaries, we would accrue and pay the appropriate withholding and local income taxes.
We file federal income tax returns in the U.S. and income tax returns in various states and foreign jurisdictions. With few exceptions, we are no longer subject to income tax examinations by any of the taxing authorities for years before 2014.
As of December 31, 2017, and 2016, we provided a liability of $0.5 million and $0.6 million, respectively, for unrecognized tax benefits related to U.S. federal and state, and foreign jurisdictions. These unrecognized tax benefits are netted against their related noncurrent deferred tax assets.
We accrue interest and penalties related to unrecognized tax benefits through income tax expense. We had $0.3 million and $0.2 million accrued for the payment of interest and penalties as of December 31, 2017 and December 31, 2016, respectively. Accrued interest and penalties are included in the $0.5 million of unrecognized tax benefits.
A reconciliation of the beginning and ending amount of unrecognized tax benefits (including interest and penalties) at December 31 follows:
 
2017
 
2016
 
2015
Balance - Beginning of the year
$
628

 
$
489

 
$
27

Gross increase - tax positions in prior periods
68

 
40

 
445

Gross decreases - tax positions in prior periods
(38
)
 
—

 
—

Gross increases - current period tax positions
29

 
103

 
44

Lapse of statute of limitations
(221
)
 
(4
)
 
(27
)
Currency translation adjustment
19

 
—

 
—

Balance - End of the year
$
485

 
$
628

 
$
489