Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Components of income taxes attributable to operations

The components of income taxes attributable to operations were as follows:



	Year Ended December 31,
	2014			2013			2012
Current expense (benefit):
United States	$	29,749		$	27,537		$	8,267
Non-U.S.	801			5,159			737
	30,550			32,696			9,004
Deferred expense (benefit):
United States	(8,168		)	1,937			(9,779		)
Non-U.S.	605			(1,859		)	(3,235		)
	(7,563		)	78			(13,014		)
Income tax expense (benefit)	$	22,987		$	32,774		$	(4,010	)

Schedule of income or loss before income taxes by jurisdiction

The Company’s income or loss before income taxes was earned in the following jurisdictions:



	Year Ended December 31,
	2014			2013			2012
Income (Loss) Before Income Taxes:
Bermuda	$	794,926		$	717,661		$	609,710
United States	53,055			87,032			9,600
Other	(3,734		)	(62,188		)	(29,923		)
Total	$	844,247		$	742,505		$	589,387

Reconciliation of the differences between the provision for income taxes and the expected tax provision at the weighted average tax rate

A reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate follows:



	Year Ended December 31,
	2014			2013			2012
Expected income tax expense (benefit) computed on pre-tax income at weighted average income tax rate	$	18,178		$	17,506		$	(3,426	)
Addition (reduction) in income tax expense (benefit) resulting from:
Tax-exempt investment income	(8,048		)	(8,255		)	(9,257		)
Meals and entertainment	711			599			688
State taxes, net of U.S. federal tax benefit	1,281			431			270
Foreign branch taxes	464			703			544
Prior year adjustment	320			2,810			(1,581		)
Foreign exchange gains & losses	746			(1,254		)	(436		)
Changes in applicable tax rate	(51		)	2,007			1,193
Dividend withholding taxes	3,276			4,619			2,511
Change in valuation allowance	(736		)	11,795			4,281
Contingent consideration	6,763			—			—
Other	83			1,813			1,203
Income tax expense (benefit)	$	22,987		$	32,774		$	(4,010	)

Significant components of deferred income tax assets and liabilities

Significant components of the Company’s deferred income tax assets and liabilities were as follows:



	December 31,
	2014			2013
Deferred income tax assets:
Net operating loss	$	12,017		$	15,294
AMT credit carryforward	5,309			14,456
Discounting of net loss reserves	63,880			53,293
Net unearned premium reserve	34,087			30,698
Compensation liabilities	27,765			26,481
Foreign tax credit carryforward	4,628			4,343
Interest expense	5,208			6,049
Goodwill	885			—
Tax and loss bonds	21,247			—
Other, net	13,408			13,347
Deferred tax assets before valuation allowance	188,434			163,961
Valuation allowance	(12,624		)	(15,548		)
Deferred tax assets net of valuation allowance	175,810			148,413
Deferred income tax liabilities:
Depreciation and amortization	(7,579		)	(3,810		)
Deferred acquisition costs, net	(2,744		)	(3,369		)
Deposit accounting liability	(4,170		)	(4,581		)
Contingency reserve	(18,480		)	—
Net unrealized appreciation of investments	(11,695		)	(6,354		)
Other, net	(150		)	(1,738		)
Total deferred tax liabilities	(44,818		)	(19,852		)
Net deferred income tax assets	$	130,992		$	128,561

Summary of open tax years potentially subject to examination, by jurisdiction

The following table details open tax years that are potentially subject to examination by local tax authorities, in the following major jurisdictions:



Jurisdiction	Tax Years
United States	2009-2014
United Kingdom	2009-2014
Ireland	2010-2014
Canada	2010-2014
Switzerland	2011-2014
Denmark	2011-2014