Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Sources of income (loss) before income taxes

The sources of income (loss) before income taxes are as follows (in thousands):



	Years Ended December 31,
	2017			2016			2015
Domestic	$	(12,487	)	$	(41,246	)	$	21,065
Foreign	(16,866		)	(19,060		)	(42,175		)
Total	$	(29,353	)	$	(60,306	)	$	(21,110	)

Components of income taxes

Components of income taxes are as follows (in thousands):



	Years Ended December 31,
	2017			2016			2015
Current:
Federal	$	(166	)	$	—		$	(4,715	)
State and local	116			28			41
Foreign	5,494			5,574			1,274
Deferred:
Federal	(1,263		)	—			2,726
Foreign	(4,157		)	(1,181		)	4,718
Total income tax expense	$	24		$	4,421		$	4,044

Reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax

A reconciliation of the expected income tax expense on income (loss) before income taxes using the statutory federal income tax rate of 35% for 2017, 2016 and 2015 to income tax expense follows (in thousands):



	Years Ended December 31,
	2017			2016			2015
Expected income tax expense at 35%	$	(10,274	)	$	(21,107	)	$	(7,389	)
Foreign tax rate differential	(2,914		)	5,932			1,769
Foreign tax differences	(5,610		)	(4,828		)	4,104
State and local taxes	116			28			41
Nondeductible expenses	4,308			(259		)	578
Change in U.S. tax rate	77,410			—			—
Expired Capital Loss	1,114			1,321			15,950
Valuation allowance:
Valuation allowance on expiring capital losses	(1,114		)	(1,321		)	(15,950		)
Valuation allowance on operations	(63,012		)	24,655			4,941
Total income tax expense	$	24		$	4,421		$	4,044

Tax effects of the cumulative temporary differences resulting in the net deferred income tax asset (liability)

As a result of passage of the Tax Cut and Jobs Act (the “Act”) on December 22, 2017, the Company’s U.S. deferred tax assets, liabilities, and associated valuation allowance as of December 31, 2017 have been re-measured at the new U.S. federal tax rate of 21%. The tax effects of the cumulative temporary differences resulting in the net deferred income tax asset (liability) are as follows (in thousands):



	December 31,
	2017			2016
Non-current deferred:
Deferred income tax assets:
Accrued expenses	$	1,976		$	2,994
Allowance Accounts	2,960			4,861
Net operating loss carryforward	87,705			98,896
Capital loss carryforward	—			1,114
Equity method investment	35,292			58,820
Original issue discount	9,624			17,924
Basis in identified intangibles	9,408			15,286
Tax credit carryforwards	6,929			7,051
Contingency accrual	788			—
Other	4,035			10,755
Total non-current deferred income tax asset	158,717			217,701
Valuation allowance	(153,463		)	(217,589		)
Net non-current deferred income tax asset	5,254			112
Deferred income tax liabilities:
Other	—			(1,240		)
Unbilled receivables	(3,501		)	(1,908		)
Basis in property, plant and equipment	—			(531		)
Total net non-current deferred income tax asset (liability)	$	1,753		$	(3,567	)

Aggregate changes in gross amount of unrecognized tax benefits

During 2017, 2016 and 2015, the aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):



	Years Ended December 31,
	2017			2016		2015
Beginning balance	$	1,299		$	1,250	$	1,957
Increases in unrecognized tax benefits – current year positions	59			49		75
Decreases in unrecognized tax benefits – prior year position	(911		)	—		(782		)
Ending balance	$	447		$	1,299	$	1,250