Note 3 - Income Taxes

6 Months Ended

Jun. 30, 2016

Note 3. Income Taxes

Major components of our income tax provision (benefit) for the three and six months ended June 30, 2016 and 2015 are as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016		2015
Current:
Domestic	$	2,506		$	1,768		$	—	$	1,865
Foreign		1,627			(553	)		2,642		155
Total current income tax provision (benefit)		4,133			1,215			2,642		2,020

Deferred:
Domestic		8,777			1,167			9,365		3,588
Foreign		(1,414	)		(2,514	)		1,143		(4,301	)
Total deferred income tax benefit		7,363			(1,347	)		10,508		(713	)
Total income tax provision (benefit)	$	11,496		$	(132	)	$	13,150	$	1,307

As of June 30, 2016, we have a net deferred tax asset in the U.S. of $33.5 million, a net deferred tax liability in Canada of $128.4 million, and a net deferred tax asset in Mexico of $9.3 million, for a consolidated worldwide net deferred tax liability of $85.6 million. Our ability to utilize our deferred tax assets depends on future taxable income generated from operations. At June 30, 2016 and December 31, 2015, the balances of the valuation allowances on our deferred tax assets were $110 million and $116 million, respectively, primarily for net operating losses and tax credit carryforwards. The amount of the deferred tax asset considered recoverable, however, could be reduced in the near term if estimates of future taxable income are reduced.

During the quarter ended June 30, 2016, there was a change in judgment about the realizability of our deferred tax assets in Mexico. Based on revised projections of future taxable income, tax net operating losses are now projected to be fully utilized. The valuation allowance in Mexico decreased to $1.3 million based on this change in judgment.

The current income tax provisions for the three months ended June 30, 2016 and 2015 vary from the amounts that would have resulted from applying the statutory income tax rate to pre-tax income due primarily to the effects of percentage depletion for all periods presented and the impact of taxation in foreign jurisdictions.