INCOME TAX

Pre-tax income for the years ended December 31, 2015, 2014 and 2013 consists of the following (dollars in thousands):



	2015		2014		2013
Pre-tax income - U.S.	$	493,328	$	768,857	$	473,223
Pre-tax income - foreign	251,467		239,676		162,031
Total pre-tax income	$	744,795	$	1,008,533	$	635,254

The provision for income tax expense for the years ended December 31, 2015, 2014 and 2013 consists of the following (dollars in thousands):



	2015			2014			2013
Current income tax expense (benefit):
U.S.	$	1,588		$	18,495		$	(48,831	)
Foreign	92,045			135,260			34,470
Total current	93,633			153,755			(14,361		)
Deferred income tax expense (benefit):
U.S.	193,204			242,694			226,771
Foreign	(44,208		)	(71,963		)	4,007
Total deferred	148,996			170,731			230,778
Total provision for income taxes	$	242,629		$	324,486		$	216,417

Provision for income tax expense differed from the amounts computed by applying the U.S. federal income tax statutory rate of 35% to pre-tax income as a result of the following for the years ended December 31, 2015, 2014 and 2013 (dollars in thousands):



	2015			2014			2013
Tax provision at U.S. statutory rate	$	260,678		$	352,987		$	222,339
Increase (decrease) in income taxes resulting from:
Foreign tax rate differing from U.S. tax rate	(9,950		)	(12,483		)	(8,032		)
Differences in tax basis in foreign jurisdictions	(32,472		)	(8,256		)	(26,484		)
Deferred tax valuation allowance	19,157			2,076			26,507
Amounts related to tax audit contingencies	88			(9,083		)	9,034
Corporate rate changes - Canada	—			—			(414		)
Corporate rate changes - other	—			280			(1,184		)
Subpart F	3,473			6,132			8,255
Foreign tax credits	(1,936		)	(1,045		)	(1,786		)
Return to provision adjustments	1,482			(8,123		)	(12,465		)
Other, net	2,109			2,001			647
Total provision for income taxes	$	242,629		$	324,486		$	216,417
Effective tax rate	32.6		%	32.2		%	34.1		%

Total income taxes for the years ended December 31, 2015, 2014 and 2013 were as follows (dollars in thousands):



	2015			2014			2013
Provision for income taxes	$	242,629		$	324,486		$	216,417
Income tax from OCI and additional paid-in-capital:
Net unrealized holding gain (loss) on debt and equity securities recognized for financial reporting purposes	(339,889		)	348,697			(467,454		)
Exercise of stock options	(2,963		)	3,011			(3,125		)
Foreign currency translation	16,478			22,998			12,330
Unrealized pension and post retirement	1,726			(14,770		)	7,640
Total income taxes provided	$	(82,019	)	$	684,422		$	(234,192	)

The tax effects of temporary differences that give rise to significant portions of the deferred income tax asset and liabilities at December 31, 2015 and 2014, are presented in the following tables (dollars in thousands):



	2015			2014
Deferred income tax assets:
Nondeductible accruals	$	116,106		$	118,389
Differences between tax and financial reporting amounts concerning certain reinsurance transactions	63,543			64,445
Differences in the tax basis of cash and invested assets	5,931			—
Investment income differences	—			56,176
Deferred acquisition costs capitalized for tax	131,714			92,832
Net operating loss carryforward	524,501			170,965
Capital loss and tax credit carryforwards	77,888			26,365
Subtotal	919,683			529,172
Valuation allowance	(127,132		)	(112,005		)
Total deferred income tax assets	792,551			417,167
Deferred income tax liabilities:
Deferred acquisition costs capitalized for financial reporting	1,011,753			961,170
Differences between tax and financial reporting amounts concerning certain reinsurance transactions	1,509,211			1,044,097
Differences in the tax basis of cash and invested assets	336,870			667,601
Investment income differences	14,654			8,187
Differences in foreign currency translation	81,492			64,115
Prepaid expenses	1,014			—
Total deferred income tax liabilities	2,954,994			2,745,170
Net deferred income tax liabilities	$	2,162,443		$	2,328,003
Balance sheet presentation of net deferred income tax liabilities:
Included in other assets	$	55,885		$	37,814
Included in deferred income taxes	2,218,328			2,365,817
Net deferred income tax liabilities	$	2,162,443		$	2,328,003

As of December 31, 2015, a valuation allowance for deferred tax assets of approximately $127.1 million was provided on the total deferred tax assets in certain jurisdictions. The valuation allowance is primarily related to numerous branches and legal entities for which there is no history of earnings in recent years. Further there is a partial valuation allowance on RGA Reinsurance Company of South Africa, Limited ("RGA South Africa"), RGA Reinsurance Company of Australia Limited (“RGA Australia”) and Aurora National net operating losses, RGA International Reinsurance Company Limited’s ("RGA International") foreign tax credit and RGA's deferred tax asset related to share expense for foreign entities. As of December 31, 2014, a valuation allowance for deferred tax assets of approximately $112.0 million was provided on the total deferred tax assets. The valuation allowance is primarily related to numerous branches and legal entities for which there is no history of earnings in recent years. Further there is a partial valuation allowance on RGA South Africa and RGA Australia's net operating losses, RGA International's foreign tax credit and on RGA's deferred tax asset related to share expense for foreign entities. The Company utilizes valuation allowances when it believes, based on the weight of the available evidence, that it is more likely than not that the deferred income tax asset will not be utilized.

The earnings of substantially all of the Company’s foreign subsidiaries have been permanently reinvested in foreign operations. A provision of $4.2 million has been made for U.S. taxes on repatriation. No other provision has been made for U.S. tax or foreign withholding taxes that may be applicable upon any repatriation or sale. The determination of the unrecognized deferred tax liability for temporary differences related to investments in the Company’s foreign subsidiaries is not practicable. At December 31, 2015 and 2014, the financial reporting basis in excess of the tax basis for which no deferred taxes have been recognized was approximately $992.9 million and $1,115.2 million, respectively.

During 2015, 2014 and 2013, the Company received federal and foreign income tax refunds of approximately $136.8 million, $9.3 million and $2.6 million, respectively. The Company made cash income tax payments of approximately $178.4 million, $79.6 million and $113.4 million in 2015, 2014 and 2013, respectively. At December 31, 2015 and 2014, the Company recognized gross deferred tax assets associated with net operating losses of approximately $1,771.0 million and $647.0 million, respectively. The earliest expiration for net operating losses that do not have a valuation allowance is 2025, during which $10.5 million of net operating losses would expire if not utilized. The remaining net operating losses have either a valuation allowance or indefinite carryforward periods. However, these net operating losses, other than the net operating losses for which there is a valuation allowance, are expected to be utilized in the normal course of business during the period allowed for carryforwards and in any event, are not expected to be lost, due to the application of tax planning strategies that the Company would utilize.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is under continuous examination by the Internal Revenue Service and is subject to audit by taxing authorities in other foreign jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2011 and with a few exceptions, the Company is no longer subject to state and foreign income tax examinations by tax authorities for years prior to 2010.

As of December 31, 2015, the Company’s total amount of unrecognized tax benefits was $296.2 million and the total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, was $30.6 million. Management believes there will be no material impact to the Company’s effective tax rate related to unrecognized tax benefits over the next 12 months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013, is as follows (dollars in thousands):



	Total Unrecognized Tax Benefits
	2015			2014			2013
Beginning balance, January 1	$	274,661		$	279,801		$	245,636
Additions for tax positions of prior years	26,170			17,431			41,228
Reductions for tax positions of prior years	(7,820		)	(26,001		)	(10,401		)
Additions for tax positions of current year	3,396			3,430			3,338
Settlements with tax authorities	(194		)	—			—
Ending balance, December 31	$	296,213		$	274,661		$	279,801

The Company recognized interest expense (benefit) associated with uncertain tax positions in 2015, 2014 and 2013 of $8.2 million, $(36.6) million and $7.6 million, respectively. As of December 31, 2015 and 2014, the Company had $28.8 million and $20.7 million, respectively, of accrued interest related to unrecognized tax benefits.