Income Taxes

The jurisdictional components of income (loss) before income taxes consist of the following (amounts in thousands):



	Year ended December 31,
	2014			2013			2012
Domestic	$	(49,050	)	$	(66,147	)	$	42,194
Foreign	(272		)	10,369			4,192
Income (loss) before income tax	$	(49,322	)	$	(55,778	)	$	46,386

The components of our income tax expense (benefit) consist of the following (amounts in thousands):



	Year ended December 31,
	2014			2013			2012
Current tax:
Federal	$	(112	)	$	(380	)	$	236
State	1,325			879			1,214
Foreign	3,149			2,302			1,479
	4,362			2,801			2,929
Deferred taxes:
Federal	(17,438		)	(21,034		)	15,013
State	1,304			(3,520		)	(749		)
Foreign	468			1,907			(839		)
	(15,666		)	(22,647		)	13,425
Income tax expense (benefit)	$	(11,304	)	$	(19,846	)	$	16,354

The difference between the income tax expense (benefit) and the amount computed by applying the federal statutory income tax rate of 35% to income (loss) before income taxes consists of the following (amounts in thousands):



	Year ended December 31,
	2014			2013			2012
Expected tax expense (benefit)	$	(17,263	)	$	(19,522	)	$	16,235
State income taxes	1,214			(1,717		)	302
Incentive stock options	(208		)	66			43
Net tax benefits and nondeductible expenses in foreign jurisdictions	957			(92		)	533
Foreign currency translation gain (loss)	2,699			617			(1,414		)
Nondeductible expenses for tax purposes	920			863			770
Valuation allowance	496			—			(206		)
Other, net	(119		)	(61		)	91
Income tax expense (benefit)	$	(11,304	)	$	(19,846	)	$	16,354

Income tax expense (benefit) was allocated as follows (amounts in thousands):



	Year ended December 31,
	2014			2013			2012
Results of operations	$	(11,304	)	$	(19,846	)	$	16,354
Stockholders' equity	201			321			449
Income tax expense (benefit)	$	(11,103	)	$	(19,525	)	$	16,803

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. The components of our deferred income tax assets and liabilities were as follows (amounts in thousands):



	Year ended December 31,
	2014			2013
Deferred tax assets:
Capital loss carryforward	$	1,009		$	1,008
Intangibles	33,542			36,442
Employee benefits and insurance claims accruals	12,146			9,332
Accounts receivable reserve	908			501
Employee stock-based compensation	8,440			8,905
Accrued expenses not deductible for tax purposes	1,391			749
Accrued revenue not income for book purposes	429			942
Federal and state net operating loss and AMT credit carryforward	84,782			94,605
Foreign net operating loss carryforward	2,562			3,411
	145,209			155,895
Valuation allowance	(1,504		)	(1,008		)
Total deferred tax assets	143,705			154,887
Deferred tax liabilities:
Property and equipment	199,532			225,275
Total deferred tax liabilities	199,532			225,275
Net deferred tax liabilities	$	55,827		$	70,388

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on the expectation of future taxable income and that the deductible temporary differences will offset existing taxable temporary differences, we believe it is more likely than not that we will realize the benefits of these deductible temporary differences, with the exception of the items noted below.

As of December 31, 2014, we had a $1.0 million deferred tax asset related to the sale of our ARPSs investments which will represent a capital loss for tax treatment purposes. We can recognize a tax benefit associated with this loss to the extent of capital gains we expect to earn in future periods. We recorded a valuation allowance to fully offset our deferred tax asset relating to this capital loss since we believe capital gains are not likely in future periods. In addition, we have set up a $0.5 million valuation allowance against net operating losses in certain states.

As of December 31, 2014, we had $84.8 million and $2.6 million of deferred tax assets related to domestic and foreign net operating losses, respectively, that are available to reduce future taxable income. In assessing the realizability of our deferred tax assets, we only recognize a tax benefit to the extent of taxable income that we expect to earn in the jurisdiction in future periods. We estimate that our operations will result in taxable income in excess of our net operating losses and we expect to apply the net operating losses against taxable income that we have estimated in future periods. The domestic net operating losses can be used to offset future domestic taxable income through 2033, while the majority of the foreign net operating losses can be carried forward indefinitely.

Deferred income taxes have not been provided on the future tax consequences attributable to difference between the financial statements carrying amounts of existing assets and liabilities and the respective tax bases of our foreign subsidiary based on the determination that such differences are essentially permanent in duration in that the earnings of the subsidiary is expected to be indefinitely reinvested in foreign operations. As of December 31, 2014, the cumulative undistributed earnings/loss of the subsidiary was approximately a $11.6 million loss. If earnings were not considered indefinitely reinvested, deferred income taxes would have been recorded after consideration of foreign tax credits. It is not practicable to estimate the amount of additional tax that might be payable on earnings, if distributed.

On December 26, 2012, Colombia enacted a tax reform bill that, among other things, decreased the corporate tax rate from 33% to 25%, but also added a new 9% tax for equality, which results in a combined tax rate of 34%. Net operating losses cannot be utilized against the new 9% tax for equality, and therefore the associated deferred tax asset must now be based on the lower 25% corporate tax rate only. Other deferred tax assets and liabilities must now be based on the higher combined income tax rate of 34%. Included in our 2012 deferred foreign tax expense is a $1.7 million expense to adjust our Colombian net deferred tax assets and liabilities for the change in rates.

On December 23, 2014, the Colombian government enacted a tax reform bill that among other things, increased the tax for equality ("CREE") rate from 9% to 14% in 2015, 15% in 2016, 17% in 2017 and 18% in 2018. Deferred tax assets and liabilities (with the exception of net operating losses) must now be based on the higher combined income tax rate and CREE rate of 39% in 2015, 40% in 2016, 42% in 2017 and 43% in 2018. Included in our 2014 deferred foreign tax expense (benefit) is a $0.2 million benefit to adjust our Colombian net deferred tax assets and liabilities for the change in rates. In addition, a new net-worth tax was enacted for all Colombian entities. The tax is calculated based on an entity’s net equity as of January 1, 2015. The tax expense will be recognized when the net-worth tax is assessed, beginning annually from 2015 through 2017. Based on our Colombian operation's net equity, our net-worth tax obligations are expected to be approximately $1.4 million, $1.2 million and $0.5 million for the years ended December 31, 2015, 2016 and 2017, respectively. The net worth tax is not deductible for income tax purposes.

We have no unrecognized tax benefits relating to ASC Topic 740 and no unrecognized tax benefit activity during the year ended December 31, 2014.

We adopted a policy to record interest and penalty expense related to income taxes as interest and other expense, respectively. At December 31, 2014, no interest or penalties have been or are required to be accrued. Our open tax years for our federal income tax returns in the United States are for the years ended December 31, 2011 to 2013. Our open tax years for our income tax returns in Colombia are for the years ended December 31, 2009 to 2013.