Income Taxes

We and our subsidiaries file a consolidated U.S. federal income tax return. We believe that our recorded assets and liabilities are reasonable. However, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, and therefore our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

Components of income tax provision (benefit) on continuing operations reflected in the consolidated statements of operations consist of the following (in thousands):



	Year Ended December 31,
	2015			2014		2013

Current	$	1,832		$	43,817	$	57,128
Deferred	(103,022		)	23,154		(25,516		)
	$	(101,190	)	$	66,971	$	31,612



Domestic	$	(102,978	)	$	29,613	$	11,615
Foreign	1,788			37,358		19,997
	$	(101,190	)	$	66,971	$	31,612

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



	Year Ended December 31,
	2015			2014		2013

Domestic	$	(485,760	)	$	73,700	$	36,176
Foreign	7,590			188,821		107,412
	$	(478,170	)	$	262,521	$	143,588

Income taxes are provided based on the U.S. statutory rate of 35% and at the local statutory rate for each foreign jurisdiction adjusted for items that are allowed as deductions for federal and foreign income tax reporting purposes, but not for book purposes. The primary differences between the U.S. statutory rate and our effective rate from continuing operations are as follows:



	Year Ended December 31,
	2015		2014		2013

Statutory rate	35.0	%	35.0	%	35.0	%
Foreign provision	(13.7	)	(9.1	)	(11.6	)
Other	(0.1	)	(0.4	)	(1.4	)
Effective rate	21.2	%	25.5	%	22.0	%

Deferred income taxes result from the effect of transactions that are recognized in different periods for financial and tax reporting purposes. The nature of these differences and the income tax effect of each are as follows (in thousands):



	December 31,
	2015			2014
Deferred tax liabilities:
Depreciation	$	173,863		$	211,903
Original Issue Discount on 2032 Notes	17,957			16,269
Equity investments in production facilities	8,029			50,685
Prepaid and other	1,883			4,211
Total deferred tax liabilities	$	201,732		$	283,068
Deferred tax assets:
Net operating losses	$	(23,595	)	$	(23,076	)
Reserves, accrued liabilities and other	(52,672		)	(53,973		)
Total deferred tax assets	(76,267		)	(77,049		)
Valuation allowance	1,936			23,076
Net deferred tax liabilities	$	127,401		$	229,095
Deferred income tax is presented as:
Current deferred tax assets	(53,573		)	(31,180		)
Non-current deferred tax liabilities	180,974			260,275
Net deferred tax liabilities	$	127,401		$	229,095

At December 31, 2015, our U.S. net operating losses available for carryforward or carryback totaled $47.2 million and our foreign tax credits available for carryforward or carryback totaled $7.9 million. The net operating loss carryforward would expire in 2035 if unused, while the foreign tax credit carryforward would expire in 2025 if unused. We anticipate fully utilizing the net operating loss and $4.6 million of the foreign tax credits via carryback claims. At December 31, 2015, the U.K. net operating losses of our well intervention company available for carryforward or carryback totaled $13.7 million. We anticipate fully utilizing the net operating loss via a carryback claim. At December 31, 2015, we had a $1.9 million valuation allowance related to certain non-U.S. deferred tax assets, primarily net operating losses generated from our oil and gas operations in the U.K., as management believes it is more likely than not that we will not be able to utilize the tax benefit. Additional valuation allowances may be made in the future if in management’s opinion it is more likely than not that the tax benefit will not be utilized.

We consider the undistributed earnings of our non-U.S. subsidiaries without operations in the U.S. to be permanently reinvested. At December 31, 2015 and 2014, our non-U.S. subsidiaries without operations in the U.S. had accumulated earnings and profits of approximately $304.0 million and $338.0 million, respectively. We have not provided deferred U.S. income tax on the accumulated earnings and profits from our non-U.S. subsidiaries without operations in the U.S. as we consider them permanently reinvested.

We had no uncertain tax positions as of December 31, 2015. In 2014, we recognized a $3.4 million tax benefit as a result of the completion of examination procedures for the 2006 through 2010 audit period by the U.S. Internal Revenue Service (see below). We account for tax-related interest in interest expense and tax penalties in selling, general and administrative expenses. We charged $0.2 million to income tax expense for interest and penalties accrued in 2013, which brought our total liabilities for interest and penalties to $1.3 million at December 31, 2013. In 2014, in connection with the recognition of the $3.4 million tax benefit from the completion of examination procedures by the Internal Revenue Service, we reversed approximately $1.3 million of accrued interest and penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	2014			2013

Balance at January 1,	$	4,723		$	4,506
Additions for tax positions of prior years	—			217
Reductions for tax positions of prior years	(4,723		)	—
Balance at December 31,	$	—		$	4,723

We file tax returns in the U.S. and in various state, local and non-U.S. jurisdictions. We anticipate that any potential adjustments to our state, local and non-U.S. jurisdiction tax returns by tax authorities would not have a material impact on our financial position. In June 2014, the Internal Revenue Service and the Joint Committee on Taxation completed the examination procedures including all appeals and administrative reviews that the taxing authorities are required and expected to perform for the 2006 through 2010 audit period, and in September 2014, we received an income tax refund in the amount of $35.2 million. The refund was primarily attributable to the utilization of a net operating loss carryback from 2010. The tax periods from 2012 through 2015 remain open to review and examination by the Internal Revenue Service. In non-U.S. jurisdictions, the open tax periods include 2009 through 2015.