

8.	INCOME TAXES

Income (loss) before income tax expense (benefit) and equity in earnings (losses) of 50% or less owned companies derived from U.S. and foreign companies for the years ended December 31 were as follows (in thousands):



	2016			2015			2014
United States	$	(242,375	)	$	(25,441	)	$	160,782
Foreign	(29,200		)	(2,896		)	(5,409		)
Eliminations and other	9,327			(2,461		)	7,862
	$	(262,248	)	$	(30,798	)	$	163,235

As of December 31, 2016, cumulative undistributed net earnings of foreign subsidiaries included in the Company’s consolidated retained earnings were $7.9 million.

The Company files a consolidated U.S. federal tax return. The components of income tax expense (benefit) for the years ended December 31 were as follows (in thousands):



	2016			2015			2014
Current:
State	$	5,339		$	3,155		$	5,526
Federal	(9,260		)	17,442			56,675
Foreign	5,815			5,971			10,060
	1,894			26,568			72,261
Deferred:
State	(2,568		)	(1,875		)	196
Federal	(93,246		)	(35,539		)	(17,222		)
Foreign	90			(516		)	(38		)
	(95,724		)	(37,930		)	(17,064		)
	$	(93,830	)	$	(11,362	)	$	55,197

The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate for the years ended December 31:



	2016		2015		2014
Statutory rate	(35.0	)%	(35.0	)%	35.0	%
Non-deductible expenses	0.1	%	1.7	%	0.5	%
Noncontrolling interests	(2.6	)%	(8.1	)%	(5.3	)%
Losses of foreign subsidiaries not benefited	1.3	%	6.2	%	1.2	%
State taxes	0.3	%	0.6	%	2.3	%
Other	0.1	%	(2.3	)%	0.1	%
	(35.8	)%	(36.9	)%	33.8	%

The Company records an additional income tax benefit or expense based on the difference between the fair market value of share awards at the time of grant and the fair market value at the time of vesting or exercise. For the years ended December 31, 2016 and 2015, an additional net income tax expense was recorded in stockholders’ equity of $2.3 million and $0.1 million, respectively. For the year ended December 31, 2014, an additional net income tax benefit was recorded in stockholders’ equity of $1.1 million.

During the year ended December 31, 2013, the Company provided for income taxes of $10.1 million relating to potential tax exposures surrounding the spin-off of Era Group Inc. (“Era Group”) by means of a dividend to SEACOR’s shareholders of all the issued and outstanding common stock of Era Group (the “Era Spin-off”). As of December 31, 2016, the Company had combined unrecognized tax benefits on these potential tax exposures and associated accrued interest of $11.7 million, which is included in deferred gains and other liabilities in the accompanying consolidated balance sheets. If recognized, the unrecognized tax benefits would affect the effective tax rate in future periods. Changes in the unrecognized tax benefits may be recorded in future periods as the result of settlement by audit or the expiration of the statute of limitations in September 2017. As of December 31, 2016, an estimate of the range of the reasonably possible outcomes cannot be made.

The components of the net deferred income tax liabilities for the years ended December 31 were as follows (in thousands):



	2016			2015
Deferred tax liabilities:
Property and equipment	$	257,337		$	302,529
Long-term debt	46,380			56,110
Unremitted earnings of foreign subsidiaries	24,263			34,977
Investments in 50% or less owned companies	16,549			14,461
Intangible assets	1,908			6,150
Deductible goodwill	—			4,124
Other	194			990
Total deferred tax liabilities	346,631			419,341
Deferred tax assets:
Share award plans	11,078			11,827
Losses on marketable securities	20,746			8,863
Deductible goodwill	1,611			—
Debt and equity issuance costs	7,638			3,029
Other	20,557			8,991
Total deferred tax assets	61,630			32,710
Valuation allowance	(3,600		)	(3,357		)
Net deferred tax assets	58,030			29,353
Net deferred tax liabilities	$	288,601		$	389,988

During the year ended December 31, 2016, the Company increased its valuation allowance for state net operating loss carryforwards from $3.4 million to $3.6 million.

In April 2016, the Internal Revenue Service (“IRS”) selected for examination the Company’s tax return for the year ended December 31, 2014. The examination has been completed and the results of the audit had no material impact on the Company’s consolidated financial position, results of operations or cash flows.