INCOME AND MINING TAXES

The components of Income (loss) before income taxes are below:



	Year ended December 31,
In thousands	2016			2015			2014
United States	$	(13,112	)	$	(43,924	)	$	(213,883	)
Foreign	14,225			(349,522		)	(1,401,245		)
Total	$	1,113		$	(393,446	)	$	(1,615,128	)

The components of the consolidated Income and mining tax (expense) benefit from continuing operations are below:



	Year ended December 31,
In thousands	2016			2015			2014
Current:
United States	$	—		$	49		$	904
United States — State mining taxes	(7,826		)	(4,305		)	(879		)
United States — Foreign withholding tax	(4,263		)	—			(6,250		)
Argentina	10			715			(71		)
Australia	14			130			—
Bolivia	6,252			(5,154		)	(4,008		)
Canada	(1,841		)	(516		)	(145		)
Mexico	(9,581		)	(476		)	(10,122		)
Deferred:
United States	15,556			1,778			5,743
United States — State mining taxes	748			1,952			—
Argentina	115			(1,197		)	24,478
Australia	(1,638		)	3,223			(401		)
Bolivia	—			—			22,122
Canada	1,338			2,875			2,662
Mexico	55,383			27,189			394,221
New Zealand	(28		)	—			—
Income tax (expense) benefit	$	54,239		$	26,263		$	428,254

The Company’s effective tax rate is impacted by recurring items, such as foreign exchange rates on deferred tax balances, uncertain tax positions, and the full valuation allowance on the deferred tax assets relating to losses in the United States and certain foreign jurisdictions. During the year ended December 31, 2016, the Company completed a legal entity reorganization to integrate recent acquisitions resulting in a valuation allowance release of $40.8 million and recorded a $15.0 million deferred tax benefit related to unremitted earnings. In addition, the Company's consolidated effective income and mining tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.

A reconciliation of the Company’s effective tax rate with the federal statutory tax rate for the periods indicated is below:



	Year ended December 31,
In thousands	2016			2015			2014
Income and mining tax (expense) benefit at statutory rate	$	(390	)	$	137,706		$	565,295
State tax provision from continuing operations	336			(2,075		)	20,253
Change in valuation allowance	61,146			(101,027		)	(151,191		)
Percentage depletion	983			—			—
Uncertain tax positions	(4,619		)	(1,947		)	(4,425		)
U.S. and foreign non-deductible expenses	(5,764		)	1,365			(4,892		)
Mineral interest related	—			(19,310		)	—
Foreign exchange rates	19,701			22,350			23,672
Foreign inflation and indexing	2,794			1,117			3,765
Foreign tax rate differences	413			(15,980		)	(63,930		)
Foreign withholding and other taxes	(13,478		)	8,140			82,884
Foreign tax credits and other, net	102			(4,076		)	(43,177		)
Legal entity reorganization	(6,985		)	—			—
Income and mining tax (expense) benefit	$	54,239		$	26,263		$	428,254

At December 31, 2016 and 2015, the significant components of the Company’s deferred tax assets and liabilities are below:



	Year ended December 31,
In thousands	2016			2015
Deferred tax liabilities:
Mexican mining tax	$	—		$	15,451
Mineral properties	69,799			—
Foreign subsidiaries — unremitted earnings	1,302			12,999
Inventory	4,426			2,353
Royalty and other long-term debt	8,685			1,648
	$	84,212		$	32,451
Deferred tax assets:
Net operating loss carryforwards	202,756			203,958
Mineral properties	—			34,966
Property, plant, and equipment	87,978			6,980
Mexico Mining Tax	6,359			—
Capital loss carryforwards	6,770			3,938
Asset retirement obligation	25,255			21,480
Unrealized foreign currency loss and other	7,413			8,424
Accrued expenses	17,713			17,905
Tax credit carryforwards	31,272			26,439
	385,516			324,090
Valuation allowance	(375,911		)	(436,829		)
	9,605			(112,739		)
Net deferred tax liabilities	$	74,607		$	145,190

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will ultimately be more likely than not able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact the Company’s ability to realize its deferred tax assets. For additional information, please see the section titled “Risk Factors” included in Item 1A. Based upon this analysis, the Company has recorded valuation allowances as follows:



	Year ended December 31,
In thousands	2016		2015
U.S.	$	292,446	$	292,677
Argentina	6,197		8,376
Canada	1,296		1,718
Bolivia	37,372		45,177
Mexico	13,033		63,373
New Zealand	23,717		25,508
Other	1,850		—
	$	375,911	$	436,829

The Company has the following tax attribute carryforwards at December 31, 2016, by jurisdiction:



In thousands	U.S.		Argentina		Bolivia		Canada		Mexico		New Zealand		Other		Total
Regular net operating losses	$	330,469	$	11,621	$	63,005	$	2,301	$	91,383	$	85,258	$	63	$	584,100
Alternative minimum tax net operating losses	184,386		—		—		—		—		—		—		184,386
Capital losses	19,315		—		—		79		—		—		—		19,394
Alternative minimum tax credits	3,173		—		—		—		—		—		—		3,173
Foreign tax credits	24,161		—		—		—		—		—		—		24,161

The U.S. net operating losses expire from 2019 through 2036; the Argentina net operating losses will expire from 2017 to 2021; the Bolivia net operating losses will expire from 2018 to 2020; the Canada net operating losses will expire from 2029 through 2036; and the Mexico net operating losses expire from 2017 to 2026. The remaining net operating losses from the foreign jurisdictions have an indefinite carryforward period. The majority of the U.S. capital losses will expire from 2020 and 2021. Alternative minimum tax credits do not expire and foreign tax credits expire if unused beginning in 2019.

The Company intends to indefinitely reinvest earnings from Mexican operations. For the years 2016 and 2015, the Company had no unremitted earnings from this jurisdiction.

A reconciliation of the beginning and ending amount related to unrecognized tax benefits is below (in thousands):



Unrecognized tax benefits at January 1, 2014	$	16,084
Gross increase to current period tax positions	1,030
Gross increase to prior period tax positions	810
Reductions in unrecognized tax benefits resulting from a lapse of the applicable statute of limitations	—
Unrecognized tax benefits at December 31, 2015	$	17,924
Gross increase to current period tax positions	1,336
Gross increase to prior period tax positions	4,854
Reductions in unrecognized tax benefits resulting from a lapse of the applicable statute of limitations	(704		)
Unrecognized tax benefits at December 31, 2016	$	23,410

At December 31, 2016, 2015, and 2014, $19.6 million, $17.9 million, and $16.1 million, respectively, of these gross unrecognized benefits would, if recognized, decrease the Company's effective tax rate.

The Company operates in numerous countries around the world and is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. The Company has historically filed, and continues to file, all required income tax returns and paid the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic income tax filings and, in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved.

The Company files income tax returns in various U.S. federal and state jurisdictions, in all identified foreign jurisdictions, and various others. The statute of limitations remains open from 2012 for the US federal jurisdiction and from 2008 for certain other foreign jurisdictions. During 2014, the U.S. Internal Revenue Service concluded its examination of the Company's 2009, 2010, and 2011 tax years. As a result of statutes of limitations that will begin to expire within the next 12 months in various jurisdictions and possible settlement of audit-related issues with taxing authorities in various jurisdictions with respect to which none of these issues are individually significant, the Company believes that it is reasonably possible that the total amount of its unrecognized income tax liability will decrease between $1.5 million and $2.5 million in the next 12 months.

The Company classifies interest and penalties associated with uncertain tax positions as a component of income tax expense and recognized interest and penalties of $8.7 million, $9.2 million, and $6.9 million at December 31, 2016, 2015, and 2014, respectively.