INCOME TAXES

Income tax expense (benefit)

Our consolidated income from continuing operations before income taxes was generated in the following jurisdictions (in thousands):



	Year Ended December 31,
	2015		2014		2013
U.S.	$	46,728	$	39,231	$	40,002
Foreign	29,618		59,340		8,497
Consolidated	$	76,346	$	98,571	$	48,499

The following table summarizes income tax provision (benefit) from continuing operations by jurisdiction (in thousands):



	Year Ended December 31,
	2015		2014			2013
Current income tax provision:
Foreign	$	4,301	$	10,430		$	15,546
U.S. federal	—		(195		)	2,067
U.S. state	32		132			1,435
	4,333		10,367			19,048
Deferred income tax provision (benefit):
Foreign	4,747		2,024			(10,222		)
U.S. federal	21,865		30,074			(23,756		)
U.S. state	2,585		4,048			(2,324		)
	29,197		36,146			(36,302		)
Provision (benefit) for income taxes	$	33,530	$	46,513		$	(17,254	)

The following table reconciles income tax provision at the U.S. federal statutory rate to the consolidated provision (benefit) for income taxes (in thousands):



	Year Ended December 31,
	2015			2014			2013
Income from continuing operations before income taxes	$	76,346		$	98,571		$	48,499
U.S. federal statutory rate	35		%	35		%	35		%
Provision at statutory rate	26,721			34,500			16,975
State income taxes—net of federal benefit	1,701			3,197			(577		)
Effect of rates other than statutory	(2,306		)	(1,925		)	(1,041		)
Effect of U.S. taxation on foreign branches	10,366			20,769			2,974
Foreign tax adjustment, prior years	7			(3,669		)	4,533
Warrants	—			4,698			24,625
Noncontrolling interest	(4,373		)	(7,986		)	(6,096		)
Foreign tax credit and offset to branch deferreds	(1,740		)	6,851			(2,876		)
Impact of valuation allowance on deferred tax assets	1,740			(7,331		)	(53,218		)
Foreign net gain on subsidiary dissolution and debt waivers	—			(13,620		)	—
Foreign withholding taxes	6			5,054			—
Other, net	1,408			5,975			(2,553		)
Provision (benefit) for income taxes	$	33,530		$	46,513		$	(17,254	)

For the years ended December 31, 2015, 2014 and 2013, the foreign subsidiaries are disregarded entities for U.S. federal income tax purposes. The foreign earnings are taxed in foreign jurisdictions as well as in the U.S. Foreign tax credits, subject to limitations, are available to reduce U.S. taxes.

Deferred tax positions

Deferred income taxes reflect the effects of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax purposes. Significant components of deferred tax assets and liabilities are as follows at December 31, 2015 and 2014 (in thousands):



	December 31,
	2015			2014
Deferred tax assets:
Net operating loss and other credit carryforwards	$	55,100		$	38,835
Compensation and benefits	8,178			10,736
Inventories	213			280
Intangible assets	35,152			43,977
Pension plan	4,643			3,733
Allowance for doubtful accounts	1,552			1,860
Deferred revenue	4,619			7,622
Foreign tax credit and offset to branch deferreds	104,026			102,286
Other	41,318			17,786
less: valuation allowance	(104,509		)	(102,769		)
Net deferred tax assets	150,292			124,346
Deferred tax liabilities:
Intangible assets	(4,638		)	(5,770		)
Prepaid expenses	(142		)	(163		)
Property, plant and equipment	(219,247		)	(178,505		)
Equity investment in partnerships	(85,385		)	(78,813		)
Other	(4,107		)	(2,549		)
Total deferred tax liabilities	(313,519		)	(265,800		)
Net deferred tax liabilities	$	(163,227	)	$	(141,454	)

At December 31, 2015, we had a cumulative U.S. federal net operating loss of approximately $127.9 million that can be carried forward to apply against taxable income generated in future years. This carry forward begins to expire in 2031. We had cumulative U.S. state net operating losses of approximately $90.4 million available for carryforward, which begin to expire in 2016. We had a foreign net operating loss of $23.6 million available for indefinite carryforward. We had foreign tax credits of approximately $59.3 million available for carry forward, which begin to expire in 2020.

Due to our emergence from bankruptcy and overall restructuring, we recorded a full valuation allowance on all U.S. federal and state deferred tax assets in all periods prior to March 31, 2013. Deferred tax assets are reduced by a valuation allowance when a determination is made that it is more likely than not that some, or all, of the deferred tax assets will not be realized based on the weight of all available evidence. Evidence which is objectively verifiable carries a higher weight in the analysis. The ultimate realization of deferred tax assets is dependent upon the existence of sufficient taxable income of the appropriate character within the carryback and carryforward period available under the tax law. Sources of taxable income include future reversals of existing taxable temporary differences, future earnings and available tax planning strategies.

In 2013, we recorded a discrete tax benefit for the partial release of our valuation allowance. Gain recognition, for tax purposes, on the contribution of a one-third interest in SCPL to Rose Rock had a material impact to the available positive and objectively verifiable evidence and combined with other factors, resulted in the change in our assessment of recoverability of the deferred tax assets. We did not release the valuation allowance attributable to a small portion of our state net operating loss carryovers which have shorter carryover periods. We have not released the valuation allowance on the foreign tax credits due to the foreign tax credit limitation and the relative subjectivity of forecasts of the relational magnitude of U.S. and foreign taxable income in future periods, as well as the shorter carryover period available for the credits.

The valuation allowance increased by $1.7 million during 2015. The change related to a net increase of $1.7 million for foreign tax credits and offset to branch deferreds.

We have analyzed filing positions in all of the federal, state and foreign jurisdictions where we are required to file income tax returns and determined that no accruals related to uncertainty in tax positions are required. All income tax years of the Company ending after the emergence from bankruptcy remain open for examination in U.S. jurisdictions under general operation of the statute of limitations, including special provisions with regard to net operating loss carryovers. In foreign jurisdictions, all tax periods prior to the emergence from bankruptcy are closed. The statute of limitations has not been waived with respect to any foreign jurisdictions post emergence and tax periods are open for examination in accordance with the general statutes of each foreign jurisdiction. Currently, there are no examinations in progress for our federal, state or foreign jurisdictions.