Income Taxes

Income tax expense (benefits) consists of:



(In thousands)	Current Expense			Deferred Expense		Total
December 31, 2016
Domestic	$	259,539		$	3,355	$	262,894
Foreign	23,634			6,425		30,059
Total expense	$	283,173		$	9,780	$	292,953

December 31, 2015
Domestic	$	179,150		$	31,145	$	210,295
Foreign	(2,318		)	19,946		17,628
Total expense	$	176,832		$	51,091	$	227,923

December 31, 2014
Domestic	$	258,337		$	28,029	$	286,366
Foreign	12,969			3,258		16,227
Total expense	$	271,306		$	31,287	$	302,593

Income before income taxes from domestic operations was $837 million, $689 million and $910 million for the years ended December 31, 2016, 2015 and 2014, respectively. Income before income taxes from foreign operations was $59 million, $43 million and $42 million for the years ended December 31, 2016, 2015 and 2014, respectively.

A reconciliation of the income tax expense and the amounts computed by applying the Federal and foreign income tax rate of 35% to pre-tax income are as follows:



(In thousands)	2016			2015			2014
Computed “expected” tax expense	$	313,753		$	256,210		$	333,269
Tax-exempt investment income	(37,379		)	(39,283		)	(38,757		)
Change in valuation allowance	1,420			2,702			1,335
Impact of foreign tax rates	1,984			4,447			6,239
State and local taxes	7,748			940			2,375
Other, net	5,427			2,907			(1,868		)
Total expense	$	292,953		$	227,923		$	302,593

At December 31, 2016 and 2015, the tax effects of differences that give rise to significant portions of the deferred tax asset and deferred tax liability are as follows:



(In thousands)	2016			2015
Deferred tax asset:
Loss reserve discounting	$	86,659		$	100,806
Unearned premiums	187,522			176,465
Other-than-temporary impairments	26,139			26,509
Restricted stock units	72,889			62,442
Other	104,130			89,761
Gross deferred tax asset	477,339			455,983
Less valuation allowance	(5,457		)	(4,037		)
Deferred tax asset	471,882			451,946
Deferred tax liability:
Amortization of intangibles	21,192			20,316
Deferred policy acquisition costs	173,481			162,344
Unrealized investment gains	238,232			115,499
Property, furniture and equipment	34,857			33,398
Investment funds	85,075			79,124
Other	53,410			48,076
Deferred tax liability	606,247			458,757
Net deferred tax liability	$	134,365		$	6,811

The Company had current tax receivables of $14,768,000 and $55,763,000 at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had foreign net operating loss carryforwards of $5.3 million that expire beginning in 2031, and an additional $29.9 million that have no expiration date. At December 31, 2016, the Company had a valuation allowance of $5.5 million, as compared to $4.0 million at December 31, 2015. The Company has provided a valuation allowance against future tax benefits of certain foreign operations. The statute of limitations has closed for the Company’s U.S. Federal tax returns through December 31, 2012.

The realization of the deferred tax asset is dependent upon the Company’s ability to generate sufficient taxable income in future periods. Based on historical results and the prospects for future current operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of this asset.

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $55 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. However, in the future, if such earnings were distributed to the Company, taxes of approximately $6.1 million, assuming all tax credits are realized, would be payable on such undistributed earnings and would be reflected in the tax provision for the year in which these earnings are no longer intended to be permanently reinvested in the foreign subsidiary.