Income taxes

The Company’s operations are conducted by its foreign subsidiaries in Latin America and the Caribbean. The foreign subsidiaries are incorporated under the laws of their respective countries and as such the Company is taxed in such foreign countries.

Statutory tax rates in the countries in which the Company operates for fiscal years 2015, 2014 and 2013 were as follows:



	2015	2014	2013
Puerto Rico	20%	20%	20%
Argentina, Martinique, French Guyana, Guadeloupe, St Croix, St. Thomas, Aruba and Curacao	35%	35%	35%
Brazil and Venezuela	34%	34%	34%
Colombia	39%	34%	34%
Peru	28%	30%	30%
Costa Rica and Mexico	30%	30%	30%
Panamá, Uruguay, Trinidad and Tobago and Netherlands	25%	25%	25%
Ecuador	25%	22%	22%
Chile	22.5%	21%	20%

Income tax expense for fiscal years 2015, 2014 and 2013 consisted of the following:



	2015			2014		2013
Current income tax expense	$	31,873		$	25,060	$	33,609
Deferred income tax (benefit) expense	(9,057		)	7,419		9,113
Income tax expense	$	22,816		$	32,479	$	42,722

Income tax expense for fiscal years 2015, 2014 and 2013 differed from the amounts computed by applying the Company’s weighted-average statutory income tax rate to pre-tax (loss) income as a result of the following:



	2015			2014			2013
Pre-tax (loss) income	(28,553		)	(76,549		)	96,594
Weighted-average statutory income tax rate (i)	64.6		%	40.9		%	31.9		%
Income tax (benefit) expense at weighted-average statutory tax rate on pre-tax (loss) income	(18,445		)	(31,346		)	30,833
Permanent differences:
Change in valuation allowance	49,478			71,695			39,621
Non-deductible expenses	6,368			15,641			13,500
Tax benefits, including Brazil and other	(24,398		)	(39,389		)	(26,948		)
Differences including exchange rate and inflation adjustment	5,170			12,980			(14,938		)
Others	4,643			2,897			654
Income tax expense	$	22,816		$	32,479		$	42,722


(i)	Weighted-average statutory income tax rate is calculated based on the aggregated amount of the income before taxes by country multiplied by the prevailing statutory income tax rate, divided by the consolidated income before taxes.

The tax effects of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities at December 31, 2015 and 2014 are presented below:



	2015			2014
Tax loss carryforwards (i)	$	254,861		$	258,046
Purchase price allocation adjustment	37,549			57,786
Property and equipment, tax inflation	45,650			53,172
Other accrued payroll and other liabilities	13,891			14,328
Share-based compensation	3,570			5,266
Provision for contingencies	2,177			2,700
Other deferred tax assets (ii)	27,642			40,777
Other deferred tax liabilities (iii)	(9,618		)	(10,781		)
Property and equipment - difference in depreciation rates	(12,411		)	(32,850		)
Valuation allowance (iv)	(297,891		)	(301,012		)
Net deferred tax asset	$	65,420		$	87,432

(i)

As of December 31, 2015, the Company and its subsidiaries has accumulated operating tax loss carryforwards amounting to $937,989. The Company has operating tax loss carryforwards amounting to $328,559, expiring between 2016 and 2020. In addition, the Company has operating tax loss carryforwards amounting to $190,238 expiring after 2020 and operating tax loss carryforwards amounting to $419,192 that do no expire.


(ii)	Includes Venezuela’s foreign currency exchange differences amounting to $11,745 and $26,361 for the years ended December 31, 2015 and 2014, respectively.


(iii)	Primarily related to intangible assets and foreign currency exchange differences.


(iv)	In assessing the realization of deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

The total amount of $65,420 for the year ended December 31, 2015, is presented in the consolidated balance sheet as current asset, non-current asset, current liability and non-current liability amounting to $12,051; $63,321; $1,728 and $8,224, respectively.

The total amount of $87,432 for the year ended December 31, 2014, is presented in the consolidated balance sheet as current asset, non-current asset, current liability and non-current liability amounting to $17,188; $75,319; $895 and $4,180, respectively.

Deferred income taxes have not been recorded for temporary differences related to investments in certain foreign subsidiaries. These temporary differences were $143,388 at December 31, 2015 and consisted of undistributed earnings considered permanently invested in subsidiaries. Determination of the deferred income tax liability on these unremitted earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs.

As of December 31, 2015 and 2014, the Company’s gross unrecognized tax benefits totaled $63 and $221 (including interests and penalties), respectively, that would favorably affect the effective tax rate if resolved in the Company’s favor.

The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:



	2015			2014
Balances at beginning balance	$	221		$	1,697
Decrease for positions taken in prior years	(158		)	(1,476		)
Balances at ending balance	$	63		$	221

The Company is regularly under audit in multiple tax jurisdictions. It is reasonably possible that, as a result of audit progression within the next 12 months, there may be new information that causes the Company to reassess the total amount of unrecognized tax benefits recorded. While the Company cannot estimate the impact that new information may have on the unrecognized tax benefit balance, the Company believes that the liabilities that are recorded are appropriate and adequate as determined under ASC 740. The Company is generally no longer subject to income tax examinations by tax authorities for years prior to 2009.