Income Taxes

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



	Year ended December 31,
	2015			2014			2013
Domestic	$	(123,499	)	$	(49,050	)	$	(66,147	)
Foreign	(69,220		)	(272		)	10,369
Income (loss) before income tax	$	(192,719	)	$	(49,322	)	$	(55,778	)

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



	Year ended December 31,
	2015			2014			2013
Current tax:
Federal	$	(535	)	$	(112	)	$	(380	)
State	401			1,325			879
Foreign	1,238			3,149			2,302
	1,104			4,362			2,801
Deferred taxes:
Federal	(42,113		)	(17,438		)	(21,034		)
State	29			1,304			(3,520		)
Foreign	3,401			468			1,907
	(38,683		)	(15,666		)	(22,647		)
Income tax expense (benefit)	$	(37,579	)	$	(11,304	)	$	(19,846	)

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,
	2015			2014			2013
Expected tax expense (benefit)	$	(67,452	)	$	(17,263	)	$	(19,522	)
State income taxes	(2,066		)	1,214			(1,717		)
Incentive stock options	83			(208		)	66
Net tax benefits and nondeductible expenses in foreign jurisdictions	2,135			957			(92		)
Foreign currency translation loss	8,660			2,699			617
Nondeductible expenses for tax purposes	577			920			863
Valuation allowance	20,329			496			—
Other, net	155			(119		)	(61		)
Income tax expense (benefit)	$	(37,579	)	$	(11,304	)	$	(19,846	)

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



	Year ended December 31,
	2015			2014			2013
Continuing operations	$	(37,579	)	$	(11,304	)	$	(19,846	)
Shareholders' equity	962			201			321
Income tax expense (benefit)	$	(36,617	)	$	(11,103	)	$	(19,525	)

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,
	2015			2014
Deferred tax assets:
Capital loss carryforward	$	666		$	1,009
Intangibles	37,634			33,542
Employee benefits and insurance claims accruals	6,307			12,146
Accounts receivable reserve	849			908
Inventory	631			—
Employee stock-based compensation	8,093			8,440
Accrued expenses not deductible for tax purposes	453			1,391
Accrued revenue not income for book purposes	695			429
Domestic net operating loss carryforward	84,853			84,782
Foreign net operating loss carryforward	3,909			2,562
	144,090			145,209
Valuation allowance	(18,627		)	(1,504		)

Deferred tax liabilities:
Property and equipment	(142,965		)	(199,532		)
Net deferred tax assets (liabilities)	$	(17,502	)	$	(55,827	)

As of December 31, 2015, we had $88.8 million of deferred tax assets related to domestic and foreign net operating losses 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.

Except for the items listed below, we estimate that our domestic operations will result in taxable income in excess of our net operating losses and we expect to apply the net operating losses against the current year taxable income and taxable income that we have estimated in future periods. The domestic net operating losses have a 20 year carryforward period and can be used to offset future domestic taxable income until their expiration, beginning in 2029, with the latest expiration in 2033. The foreign net operating losses have an indefinite carryforward period. However, as a result of the conditions leading to the impairment of our assets in Colombia, we recorded a valuation allowance of $15.1 million that fully offsets our foreign deferred tax assets relating to net operating losses and other tax benefits.

As of December 31, 2015, we had a valuation allowance of $0.7 million related to a deferred tax asset for a capital loss which we don't believe will be realized in future periods and a valuation allowance of $2.8 million against net operating losses and other tax benefits in certain states.

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, 2015, the cumulative undistributed earnings/losses of the subsidiary was approximately a $20.3 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.

As discussed in Note 1, Organization and Summary of Significant Accounting Policies, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities be classified as noncurrent on the balance sheet rather than being separately presented as current and noncurrent portions. On December 31, 2015, we elected to early adopt ASU No. 2015-17 prospectively, thus reclassifying $6.8 million of current deferred tax assets to noncurrent on the accompanying consolidated balance sheet. The prior reporting period was not retrospectively adjusted.

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. However, as of December 31, 2015, we recorded a valuation allowance that fully offsets our foreign deferred tax assets relating to net operating losses and other tax benefits. At this time, a new net-worth tax was also enacted for all Colombian entities. The tax is calculated based on an entity’s net equity as of January 1, 2015. The tax expense is recognized when the net-worth tax is assessed, annually from 2015 through 2017. Based on our Colombian operation's net equity, our net-worth tax obligation was $1.2 million for 2015 and is expected to be approximately $0.7 million and $0.3 million for 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, 2015.

We adopted a policy to record interest and penalty expense related to income taxes as interest and other expense, respectively. At December 31, 2015, 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 and our income tax returns in Colombia are for the years ended December 31, 2010 to 2014.