Income Taxes

Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received an assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily Ireland, Singapore and the United States.

The sources of income from continuing operations before income taxes and earnings of unconsolidated equity method investment for the years ended December 31, 2015, 2014 and 2013 were as follows:



	Year Ended December 31,
	2015		2014		2013
U.S. operations	$	2,433	$	2,047	$	2,730
Non-U.S. operations	125,810		109,590		36,213
Income from continuing operations before income taxes and earnings of unconsolidated equity method investment	$	128,243	$	111,637	$	38,943

The components of the income tax provision from continuing operations for the year ended December 31, 2015, 2014 and 2013 consisted of the following:



	Year Ended December 31,
	2015			2014			2013
Current:
United States:
Federal	$	4,167		$	1,571		$	1,742
State	994			390			515
Non-U.S	14,499			9,040			2,542
Current income tax provision	19,660			11,001			4,799
Deferred:
United States:
Federal	829			2,335			963
State	57			932			386
Non-U.S	(7,775		)	(405		)	3,067
Deferred income tax provision (benefit)	(6,889		)	2,862			4,416
Total	$	12,771		$	13,863		$	9,215

Significant components of the Company’s deferred tax assets and liabilities at December 31, 2015, 2014 and 2013 consisted of the following:



	Year Ended December 31,
	2015			2014			2013
Deferred tax assets:
Non-cash share based payments	$	1,483		$	1,106		$	1,139
Net operating loss carry forwards	52,007			42,900			23,137
Interest rate derivatives	—			35			863
Other	761			340			356
Total deferred tax assets	54,251			44,381			25,495
Deferred tax liabilities:
Accelerated depreciation	(87,716		)	(79,360		)	(56,312		)
Other	(442		)	(1,795		)	(1,143		)
Total deferred tax liabilities	(88,158		)	(81,155		)	(57,455		)
Net deferred tax liabilities	$	(33,907	)	$	(36,774	)	$	(31,960	)

The Company had approximately $27,631 of net operating loss (“NOL”) carry forwards available at December 31, 2015 to offset future taxable income subject to U.S. graduated tax rates. If not utilized, these carry forwards expire between 2030 through 2035. The Company also had NOL carry forwards of $520,177 with no expiration date to offset future Irish, Mauritius and Singapore taxable income. Deferred tax assets and liabilities are included in other assets and accounts payable and accrued liabilities, respectively, in the accompanying Consolidated Balance Sheets.

We do not expect to incur income taxes on future distributions of undistributed earnings of non-U.S. subsidiaries and accordingly, no deferred income taxes have been provided for the distributions of such earnings. As of December 31, 2015 we have elected to permanently reinvest our accumulated undistributed U.S. earnings of $10,603. Accordingly, no U.S. withholding taxes have been provided. Withholding tax of $3,181 would be due if such earnings were remitted.

All of our aircraft-owning subsidiaries that are recognized as corporations for U.S. tax purposes are non-U.S. corporations. These non-U.S. subsidiaries generally earn income from sources outside the United States and typically are not subject to U.S. federal, state or local income taxes unless they operate within the U.S., in which case they may be subject to federal, state and local income taxes. The aircraft owning subsidiaries resident in Ireland, Mauritius and Singapore are subject to tax in those respective jurisdictions.

We have a U.S-based subsidiary which provides management services to our non-U.S. subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions.

Differences between statutory income tax rates and our effective income tax rates applied to pre-tax income from continuing operations at December 31, 2015, 2014 and 2013 consisted of the following:



	Year Ended December 31,
	2015			2014			2013
Notional U.S. federal income tax expense at the statutory rate:	$	44,885		$	39,073		$	13,630
U.S. state and local income tax, net	221			189			195
Non-U.S. operations:
Bermuda	(20,789		)	(12,424		)	4,749
Ireland	(3,073		)	(4,732		)	(5,514		)
Singapore	(5,650		)	(5,529		)	(597		)
Other low tax jurisdictions	(3,395		)	(2,890		)	(3,608		)
Non-deductible expenses in the U.S.	737			644			447
Other	(165		)	(468		)	(87		)
Provision for income taxes	$	12,771		$	13,863		$	9,215

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. We did not have any unrecognized tax benefits.

We conduct business globally and, as a result, the Company and its subsidiaries or branches are subject to foreign, U.S. federal and various state and local income taxes, as well as withholding taxes. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Ireland and the United States. With few exceptions, the Company and its subsidiaries or branches remain subject to examination for all periods since inception.

Our policy is that we will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the year.