INCOME TAXES

Income (loss) before income taxes attributable to U.S. (including its foreign branches) and foreign operations are as follows:



	Years Ended December 31,
	2016			2015
U.S.	$	(29,867	)	$	15,263
Foreign	13,914			(18,012		)
Total	$	(15,953	)	$	(2,749	)

No income taxes are attributable to the noncontrolling interest.

The provision for income taxes shown in the consolidated statements of operations and comprehensive loss consists of current and deferred expense (benefit) as shown in the following table:



	Years Ended December 31,
	2016			2015
Current income tax expense:
U.S. – federal and state	$	102		$	242
Foreign	7,276			3,923
Total current income tax expense	7,378			4,165
Deferred income tax benefit:
U.S. – federal and state	—			—
Foreign	(1,322		)	(1,472		)
Total deferred income tax benefit	(1,322		)	(1,472		)
Total provision for income taxes	$	6,056		$	2,693

A reconciliation of the provision for income tax expense (benefit) expected at the U.S. federal statutory income tax rate to the effective income tax rate is as follows:



	Years Ended December 31,
	2016			2015
Expected income tax benefit at 35%	$	(5,583	)	$	(962	)
Effects of expenses not deductible for tax purposes	(1,878		)	2,850
Tax effect of valuation allowance on deferred tax assets	7,115			414
Effects of differences between U.S. and foreign tax rates, net of federal benefit	6,020			(917		)
Foreign withholding and AMT	667			1,501
Rate changes	(285		)	—
Other adjustments	—			(193		)
Provision for income taxes	$	6,056		$	2,693

The net deferred tax assets consist of the following:



	December 31,
	2016		2015
Noncurrent deferred tax asset, net	$	5,122	$	3,756
Noncurrent deferred tax liability, net	—		(55		)
Net deferred tax asset	$	5,122	$	3,701

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:



	December 31,
	2016			2015
Deferred tax assets:
Deferred charges	$	1,553		$	1,316
Stock compensation expense	237			98
Other accruals	4,421			2,427
Research and development credits	160			2,406
Capital lease obligation	134			134
Foreign tax credit and AMT credit carry forwards	2,087			13,188
Financing costs	453			1,974
Unrealized loss on foreign currency transactions	700			914
Net operating loss carry forwards	15,668			14,093
Total deferred tax assets	25,413			36,550
Less: valuation allowance	(16,890		)	(26,137		)
Total deferred tax assets, net	8,523			10,413
Deferred tax liabilities:
Property and equipment	(3,061		)	(6,372		)
Intangible assets	(340		)	(340		)
Total deferred tax liabilities	(3,401		)	(6,712		)
Net deferred tax assets	$	5,122		$	3,701

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Corporation has evaluated the available evidence and the likelihood of realizing the benefit of its net deferred tax assets. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. From its evaluation, the Corporation has concluded that based on the weight of available evidence, it is not more likely than not to realize the benefit of its deferred tax assets recorded in the United States, Malaysia, Brazil and Canada at December 31, 2016. Accordingly, the Corporation had a valuation allowance totaling $16,890 and $26,137 at December 31, 2016 and 2015, respectively. Should the factors underlying management’s analysis change, future valuation adjustments to the Corporation’s net deferred tax assets may be necessary. The valuation allowance was decreased by $9,247 and increased by $414 during the years ended December 31, 2016 and 2015, respectively.

The Corporation is subject to examination in all jurisdictions in which it operates. The Corporation is no longer subject to examination by the Internal Revenue Service or other foreign taxing authorities in which it files for years prior to 2008.

Foreign earnings are considered to be permanently reinvested in operations outside the United States and therefore the Corporation has not provided for U.S. income taxes on these unrepatriated foreign earnings.

The details of the Corporation’s tax attributes are shown below:



	December 31,
Net Operating Loss Carryforwards:	2016		2015
United States	$	22,505	$	17,752
Canada	6,117		5,408
Malaysia	5,726		5,726
Brazil	5,149		6,894
Others	—		7,038
Total	$	39,497	$	42,818



	December 31,
Foreign Tax Credits Carryforwards:	2016		2015
United States	$	100	$	11,604
Canada	654		641
United Kingdom	727		356
Total	$	1,481	$	12,601



	December 31,
Net Deferred Tax Assets:	2016		2015
Bolivia	$	1,368	$	1,467
Canada	—		—
Colombia	2,249		1,735
Malaysia	233		(55		)
Peru	1,272		554
Total	$	5,122	$	3,701

Uncertain tax positions and the related interest and penalties are provided for based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent interest and penalties are assessed with respect to the uncertain tax positions, amounts accrued are reflected as income tax expense. Based on the Corporation’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Corporation’s consolidated financial statements during the years ended December 31, 2016 and 2015.

The Corporation had no accrued interest and penalties included in accrued expenses as of December 31, 2016 and 2015. Interest and penalties recognized as expense amounted to $11 and $135 for the years ended December 31, 2016 and 2015, respectively.

Net Operating Losses

Due to the Restructuring, the Corporation's U.S. federal tax net operating loss ("NOL") carryforwards, foreign tax credits ("FTC") carryforwards and Research and Development Credits ("R&D") carryforwards were subject to Section 382 and Section 383 annual limitations due to the ownership changes from the Restructuring. The Corporation determined some of the carryforwards will expire unutilized and were written down from the deferred tax assets against a full valuation allowance.

As of December 31, 2016, the Corporation had U.S. federal tax NOL carryforwards of approximately $22,505, which begin to expire in fiscal year 2034. These NOL carryforwards, subject to certain requirements and restrictions, including limitations on their use in the event of future ownership changes, may be used to offset future taxable income and thereby reduce the Corporation’s U.S. federal income taxes otherwise payable. Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), imposes an annual limit on the ability of a corporation that undergoes an ownership change to use its NOL carryforwards to reduce its tax liability.