7.	Income Taxes

Income (loss) before income taxes consists of the following (in thousands):

	Year Ended December 31,
	2016			2015			2014
Domestic	$	(2,090	)	$	(8,133	)	$	440
Foreign		8,132			6,642			4,867
Income (loss) before income taxes	$	6,042		$	(1,491	)	$	5,307

The components of the provision for income taxes are as follows (in thousands):

	Year Ended December 31,
	2016		2015			2014
Current:
Federal	$	80	$	(9	)	$	117
State		11		14			3
Foreign				—			—
Total current		91		5			120
Deferred:
Foreign		—		—			531
Total deferred		—		—			531
Provision for income taxes	$	91	$	5		$	651

The reconciliation of the federal statutory rate to Juniper’s effective tax rate is as follows:

	2016			2015			2014
Federal income tax rate		34.0	%		34.0	%		34.0	%
Foreign rate differential		(49.6	)%		151.5	%		(26.1	)%
State tax, net of federal benefit		13.4			(0.9	)		67.6
Permanent Items:
Change in fair market value of stock warrants		—			—			(2.4	)
Incentive stock options		1.0			(14.9	)		2.0
Dividend from foreign subsidiary		53.5			(79.8	)		45.2
Amortization of technical rights		(34.5	)		23.4			(6.6	)
Deferred adjustments		30.6			6.6			1.8
Other		(1.1	)		(0.5	)		0.8
Effect of permanent differences		49.5			(65.2	)		40.8
Effective income tax rate		47.3			119.4			116.3
Change in valuation allowance		(45.8	)		(119.7	)		(104.0	)
Effective income tax rate		1.5	%		(0.3	)%		12.3	%

The Company operates in multiple countries. Accordingly, separate tax filings are required based on jurisdiction. Due to the separate tax filings of our U.S., U.K. and France jurisdictions, the Company has evaluated the need for a valuation allowance on a separate jurisdiction basis. As of December 31, 2016, the Company continues to maintain a full valuation allowance against all net deferred tax assets.

In assessing the realizability of deferred tax assets, management considers positive and negative evidence to determine whether it is more likely than not that some portion or all deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax-planning strategies in making this assessment. Management believes it is more likely than not that the results of future operations will not generate sufficient taxable income in the U.S., U.K. and France in order to realize the full benefits of the deferred tax assets in the respective jurisdictions.

As of December 31, 2016, the Company has federal and state U.S. tax net operating loss carryforwards of approximately $156.2 million and $12.6 million, which begin to expire in 2021. The Company also has federal research and development credit carryforwards of approximately $1.8 million, which begin to expire in 2018. The Company also has federal alternative minimum tax credits of $0.2 million, with no expiration period.

U.S. net operating loss carryforwards do not include excess tax benefits from the exercise of share-based awards. As of December 31, 2016, the Company has non-U.S., net operating loss carryforwards of approximately $10.9 million, with no expiration period.

Under Section 382 of the Internal Revenue Code of 1986, as amended, substantial changes in the Company's ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of the Company of more than 50% within a three-year period. Any such annual limitation may significantly reduce the utilization of net operating loss carryforwards before they expire. The Company performed an analysis through June 30, 2014, and determined any potential ownership change under Section 382 during the year would not have a material impact on the future utilization of US net operating losses and tax credits. However, future transactions in the Company's common stock could trigger an ownership change for purposes of Section 382, which could limit the amount of net operating loss carryforwards and other attributes that could be utilized annually in the future to offset taxable income, if any. Any such limitation, whether as the result of sales of common stock by our existing stockholders or sales of common stock by the Company, could have a material adverse effect on results of operations in future years.

The Company follows the provisions of FASB ASC 740, Accounting for Uncertainty in Income Taxes – An Interpretation of FASB No. 109. FASB ASC 740 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements in accordance with ASC 740-20. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized upon the adoption of FASB ASC 740 and in subsequent periods. Juniper recognizes interest and penalties, if any, related to uncertain tax positions in general and administrative expenses. No uncertain tax positions or interest and penalties related to uncertain tax positions were accrued as of December 31, 2016 or 2015.

The Company files tax returns in the United States, United Kingdom, France and various state jurisdictions. All of the Company’s tax years remain open to examination by major taxing jurisdictions to which the Company is subject, as carryforward attributes generated in past years may still be adjusted upon examination by the Internal Revenue Service or state and foreign tax authorities if they have or will be used in future periods.

As of December 31, 2016, the Company does not maintain accumulated earnings and profits in the foreign jurisdictions that it currently does business. The company has repatriated current earnings from one of its foreign subsidiaries to the United States in 2015 and 2016. To the extent the Company has positive accumulated foreign earnings in the future, the Company will further assess its global business needs and decide whether or not it will permanently reinvest those earnings.

As of December 31, 2016, the Company’s open tax years subject to audit are 2013, 2014 and 2015. The Internal Revenue Service has concluded their audit of the 2011 and 2012 tax years. There were no material findings resulting from their audit.

The components of Juniper’s net deferred tax assets and liabilities are as follows (in thousands):

	December 31, 2016			December 31, 2015
Net Operating Loss	$	55,521		$	57,541
Tax Credits		2,034			1,723
Stock Based Compensation		997			1,502
Fixed Assets		(749	)		(1,386	)
Intangibles		843			1,059
Other		337			1,549
Net deferred tax assets		58,983			61,988
Less: valuation allowance:
Federal		(58,983	)		(61,988	)
Deferred tax asset	$	—		$	—