(15)	Income Taxes

Total income tax expense (benefit), from continuing operations, for the years ended December 31, 2016 and 2015 were as follows (in thousands):

	2016				2015
Income tax expense (benefit)	$	8,628			$	11,225

For the years ended December 31, 2016 and 2015, (loss) income before income tax expense consists of the following (in thousands):

	2016			2015
U.S. operations	$	(7,481	)	$	(14,078	)
Foreign operations		(233	)		(1,652	)
	$	(7,714	)	$	(15,730	)

The components of the provision for income tax (benefit) expense from continuing operations included in the consolidated statements of operations are as follows for the years ended December 31, 2016 and 2015 (in thousands):

	2016		2015
Current:
Federal	$	271	$	—
State and local, net of federal income tax benefit		65		10
Foreign		300		298
		636		308

Deferred:
Federal		7,296		6,458
State and local, net of federal income tax benefit		696		2,126
Foreign		—		2,333
		7,992		10,917
Total income tax (benefit) expense, from continuing operations	$	8,628	$	11,225

For the year ended December 31, 2016 and 2015, approximately $3.1 million and $1.1 million of Puerto Rico net operating loss carry-forwards were utilized. For the year ended December 31, 2016 and 2015, $0.4 million and $0.8 million federal net operating loss carry-forwards were utilized.

The tax effect of temporary differences and carry-forwards that give rise to deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are as follows (in thousands):

	2016			2015
Deferred tax assets:
Federal and state net operating loss carryforwards	$	116,227		$	109,020
Foreign net operating loss carryforwards		11,354			12,506
FCC licenses		6,396			6,291
Allowance for doubtful accounts		1,017			1,133
Unearned revenue		373			333
AMT credit		1,248			1,120
Derivatives and hedging instruments		7			254
Property and equipment		3,253			2,056
Accrued foreign withholding		2,238			2,136
Straight-line expense adjustments		—			31
Accrued restructuring		—			11
Production costs		11,123			11,535
Stock-based compensation		345			1,649
Intercompany expenses		4,830			3,624
Accrued Vacation/Bonus/Payroll		950			1,067
Other		1,676			1,620
Total gross deferred tax assets		161,037			154,386
Less valuation allowance		(158,081	)		(151,273	)
Net deferred tax assets		2,956			3,113
Deferred tax liabilities:
FCC licenses and goodwill		108,327			100,421
Total gross deferred tax liabilities		108,327			100,421
Net deferred tax liability	$	105,371		$	97,308

The net change in the total valuation allowance for the years ended December 31, 2016 and 2015 was an increase of $6.8 million and an increase of $8.3 million, respectively. The valuation allowance at 2016 and 2015 was primarily related to domestic and foreign net operating loss carryforwards and future deductible amounts related to the excess tax basis over the book basis of certain FCC broadcasting licenses. In 2016, the overall increase in valuation allowance was primarily due to NOLs generated during the current year.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the 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. As of December 31, 2016, the valuation allowance is comprised of $134.1 million in the US and $24.0 million in Puerto Rico. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. At December 31, 2016, we have federal and state net operating loss carry-forwards of approximately $280.0 million and $273.7 million, respectively. These net operating loss carry-forwards are available to offset future taxable income and expire from the years 2017 through 2036. In addition, at December 31, 2016, we have foreign net operating loss carry-forwards of approximately $32.1 million available to offset future taxable income expiring from the years 2017 through 2024.

In November 2015, the Financial Accounting Standards Board issued accounting standard update, ASU 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. This standard was required to be adopted for annual periods beginning after December 15, 2016, including interim periods within that annual period, with early adoption permitted. The Company retroactively adopted the accounting standard in the beginning of the fourth quarter of 2015, and the adoption had no material impact on the consolidated financial position of the Company.

Total income tax expense from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35.0% for the years ended December 31, 2016 and 2015, as a result of the following:

	2016				2015
Computed “expected” tax (benefit) expense		(35.0	)	%		(35.0	)	%
State and local income taxes, net of federal benefit		3.0				(1.8	)
Foreign tax differential		(1.6	)			(1.3	)
Current year change in valuation allowance		92.2				53.2
Nondeductible expenses		10.5				2.8
Nondeductible interest expense		44.2				21.7
Change in effective rate		(9.4	)			5.3
Return to provision		1.7				23.5
Other		6.3				3.0
		111.9		%		71.4		%

The return to provision adjustment booked in 2015 relates to non-deductible interest expense, which has no impact on the operating statement due to a full valuation allowance. The adjustment decreased the NOL DTA and decreased the corresponding valuation allowance.

U.S. Federal jurisdiction and the jurisdictions of Florida, New York, California, Illinois, Texas and Puerto Rico are the major tax jurisdictions where we file income tax returns. The tax years that remain subject to assessment of additional liabilities by the federal, state and local tax authorities are 2010 through 2016. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2012 through 2016.

For the years ended December 31, 2016 and 2015, we did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. Our evaluation was performed for the tax years ended December 31, 2010 through December 31, 2016, which are the tax years that remain subject to examination by the tax jurisdictions as of December 31, 2016. We do not expect any unrecognized tax benefits to significantly change over the next twelve months.