10.

Income Taxes and Deferred Tax Asset/Liability

Current income tax expense represents federal and state income tax paid or expected to be payable for the years shown in the consolidated statements of operations. The income tax expense (benefit) in the accompanying consolidated financial statements consists of the following (amounts in thousands):

	Years Ended December 31,
	2015		2014		2013
Current tax expense (benefit)	$	7	$	632	$	(3,928	)
Deferred tax expense		--		--		5,150
Total tax expense	$	7	$	632	$	1,222

Deferred tax assets and liabilities consist of the following (amounts in thousands):

	Long Term
	As of December 31,
	2015			2014
Assets related to:
Accrued compensation and other	$	2,084		$	1,868
Amortization and impairment of goodwill		6,705			9,489
Noncontrolling interest		2,247			2,326
Deferred revenue		688			125
Revaluation of put/call liabilities		18,638			8,471
Net operating loss carryforwards		39,317			30,822
Valuation allowance for deferred tax assets		(56,399	)		(37,774	)
Liabilities related to:
Depreciation of property and equipment		(11,766	)		(14,186	)
Receivables from and equity in construction joint ventures		(1,494	)		(1,126	)
Other		(20	)		(15	)
Net asset	$	--		$	--

The income tax provision differs from the amount using the statutory federal income tax rate of 35% for the following reasons (amounts in thousands):

	Years Ended December 31,
	2015						2014						2013
	Amount			%			Amount			%			Amount			%
Tax benefit at the U.S. federal statutory rate	$	(6,013	)		35.0	%	$	(1,608	)		35.0	%	$	(24,081	)		35.0	%
State tax based on income, net of refunds and federal benefits		(740	)		4.3			(155	)		3.4			(1,280	)		1.8
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners		(2,620	)		15.3			(2,365	)		51.5			(1,375	)		2.0
Valuation allowance		9,404			(54.7	)		4,152			(90.4	)		28,215			(41.0	)
Reduction of tax receivable		--			--			524			(11.4	)		--			--
Non-taxable interest income		--			--			--			--			(195	)		0.3
Other permanent differences		(24	)		0.1			84			(1.9	)		(62	)		0.1
Income tax expense	$	7			--	%	$	632			(13.8	)%	$	1,222			(1.8	)%

We have federal and state income tax net operating loss (“NOL”) carryforwards of $105.4 million and $48.4 million, which will expire at various dates in the next 20 years for U.S. federal income tax and in the next 5 to 20 years for the various state jurisdictions where we operate. Such NOL carryforwards expire as follows (in thousands):

Year	Amount
2020	$	15
2021		5
2028		8,748
2029		3,480
2033		73,102
2034		40,026
2035		28,465
Total	$	153,841

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2015. The cumulative three-year period loss that remained at December 31, 2015 was the result of write-downs recorded during the past three years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of December 31, 2015, a valuation allowance of $56.4 million has been recorded on the net deferred tax assets including federal and state net operating losses as they are not likely to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted in the future if objective negative evidence or cumulative losses are no longer present and additional weight may be given to subjective evidence such as our projections for growth.

If our assumptions change and we determine we will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of December 31, 2015, will be accounted for as follows: approximately $46.8 million will be recognized as a reduction of income tax expense and $9.6 million will be recorded as an increase in equity.

On September 13, 2013, the U.S. Treasury Department and the I.R.S. issued final regulations that address costs incurred in acquiring, producing, or improving tangible property (the "tangible property regulations"). The tangible property regulations are generally effective for tax years beginning on or after January 1, 2014. The Company intends to adopt the tax treatment of expenditures to improve tangible property and the capitalization of inherently facilitative costs to acquire tangible property as of January 1, 2014. The tangible property regulations will require the Company to make additional tax accounting method changes as of January 1, 2014; however, management does not anticipate the impact of these changes to be material to the Company’s consolidated financial position, its results of operations, or both.

As a result of the Company’s analysis, management has determined that the Company does not have any material uncertain tax positions. The Company’s policy is to recognize interest related to any underpayment of taxes as interest expense, and penalties as administrative expenses. No interest or penalties have been accrued at December 31, 2015 or 2014. The Company’s U.S. federal income tax returns for 2012 and later years are open and subject to examination by the I.R.S. In addition, the Company’s state income tax returns for 2011 and later years are open and subject to examination.