Note 14 – Income Taxes

The Company’s loss from operations before income tax expense by jurisdiction are as follows (in thousands):

	2015		2014		2013
Domestic	$	(150,227)	$	(76,742)	$	(48,691)
Foreign		(6,710)		(6,205)		(3,292)
Total net loss	$	(156,937)	$	(82,947)	$	(51,983)

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

	2015		2014		2013
Current U.S.	$	—	$	—	$	—
Current foreign		—		—		25
Deferred		—		—		—
Net provision	$	—	$	—	$	25

Deferred tax assets (liabilities) consist of the following at December 31 (in thousands):

	2015		2014
Net operating losses U.S.	$	203,284	$	148,451
Net operating losses foreign		8,360		6,535
Research tax credits		16,491		11,068
Other		12,903		9,963
Total deferred tax assets		241,038		176,017
Intangibles		(2,415)		(2,773)
Other		(1,767)		(321)
Total deferred tax liabilities		(4,182)		(3,094)
Net deferred tax assets		236,856		172,923
Less valuation allowance		(236,856)		(172,923)
Deferred tax assets, net	$	—	$	—

The valuation allowance increased by $63.9 million, $30.4 million and $7.1 million for the years ended December 31, 2015, 2014 and 2013, respectively, due to increases in net deferred tax assets.

The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:

	2015			2014			2013
Statutory federal tax rate		(34)	%		(34)	%		(34)	%
State income taxes, net of federal benefit		(3)	%		(3)	%		(3)	%
Research and development and other tax credits		(3)	%		(2)	%		(7)	%
Expiration of net operating losses		0	%		0	%		0	%
Release of FIN 48 liability		(2)	%		0	%		0	%
Other		1	%		2	%		3	%
Change in valuation allowance		41	%		37	%		41	%
		0	%		0	%		0	%

Realization of net deferred tax assets is dependent on the Company’s ability to generate future taxable income, which is uncertain. Accordingly, a full valuation allowance was recorded against these assets as of December 31, 2015 and 2014 as management believes it is more likely than not that the assets will not be realizable. The increase in the valuation allowance was due to increased continued losses and credits in the current year.

As of December 31, 2015, the Company had tax return reported federal net operating losses and tax credits available as follows (in thousands):

	Amount
Federal net operating losses expiring through the year 2035	$	551,433
Foreign net operating losses (no expiration)		38,001
Research tax credits expiring through the year 2035		16,397
Alternative-minimum tax credit (no expiration)		94

Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to prior ownership change of the Company. The Company does not expect such limitation, if any, to impact the use of the net operating losses.

Beginning in 2006, the windfall equity-based compensation deductions are tracked, but will not be recorded to the balance sheet until management determines more likely than not that such amounts will be utilized. As of December 31, 2015 and 2014, the Company had $13.9 million and $5.0 million of windfall stock compensation deductions, respectively. When realized, the tax benefit associated with these deductions will be credited to additional paid-in capital. These excess benefit deductions are included in the total federal and state net operating losses disclosed above.

Tabular Reconciliation of Unrecognized Tax Benefits (in thousands):

	Amount
Unrecognized tax benefits as of January 1, 2014	$	4,801
Gross increases — tax positions in prior period		—
Gross decreases — tax positions in prior period		—
Gross increases — current-period tax positions		—
Increases (decreases) from settlements		—
Unrecognized tax benefits as of December 31, 2014	$	4,801
Gross increases — tax positions in prior period		—
Gross decreases — tax positions in prior period		4,587
Gross increases — current-period tax positions		—
Increases (decreases) from settlements		—
Unrecognized tax benefits as of December 31, 2015	$	214

To the extent these unrecognized tax benefits are ultimately recognized, it would affect the annual effective income tax rate unless otherwise offset by a corresponding change in the valuation allowance. The Company does not expect that the amounts of unrecognized tax benefits will change significantly within the next twelve months.

The Company files income tax returns in the U.S. federal jurisdiction and in various states, as well as in Sweden. The Company had tax net operating losses and credit carryforwards that are subject to examination from 1998 through 2015. The statute extends for a number of years beyond the year in which the losses were generated for tax purposes. Since a portion of these carryforwards may be utilized in the future, many of these attribute carryforwards remain subject to examination. The returns in Sweden are subject to examination from 2010 through 2015.

The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2015 and 2014, the Company had no accruals for interest or penalties related to income tax matters.