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Income Taxes | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss before income tax expense (benefit) was comprised of the following for the periods indicated (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
United States | $ | (85,342 | ) |  | $ | (167,908 | ) |  | $ | (128,396 | )
Foreign | (8,341 | ) |  | 81,369 |  |  | (53,326 | )
Loss before income tax expense (benefit) | $ | (93,683 | ) |  | $ | (86,539 | ) |  | $ | (181,722 | )
Income taxes have been provided for based upon the tax laws and rates in the countries in which operations are conducted and income is earned. Components of income tax expense (benefit) consist of the following for the periods indicated (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
Current |  |  |  |  |
U.S. federal | $ | — |  |  | $ | — |  |  | $ | (13,389 | )
U.S. state and local | 7 |  |  | (15 | ) |  | 379 |
Foreign | 11,677 |  |  | 10,516 |  |  | 14,903 |
Total current | 11,684 |  |  | 10,501 |  |  | 1,893 |
Deferred |  |  |  |  |
U.S. federal | — |  |  | 56,621 |  |  | (25,838 | )
U.S. state and local | — |  |  | 2,420 |  |  | (1,512 | )
Foreign | (14,634 | ) |  | 3,376 |  |  | (186 | )
Total deferred | (14,634 | ) |  | 62,417 |  |  | (27,536 | )
Total income tax expense (benefit) | $ | (2,950 | ) |  | $ | 72,918 |  |  | $ | (25,643 | )
For the year ending December 31, 2017, the Company reported, on a provisional basis, the tax impacts resulting from the enactment of the Tax Cuts and Jobs Act (“Tax Act”) on December 22, 2017. During 2018, the Company completed its analysis of the impacts of the Tax Act during the measurement period without further adjustment. The Company has completed the accounting for the impacts of the Tax Act, although adjustments may be necessary in future periods due to technical corrections and/or regulatory guidance that may be issued by the Internal Revenue Service. Foreign taxes were incurred in the following regions for the periods indicated (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
Latin America | $ | 1,261 |  |  | $ | 5,469 |  |  | $ | 1,159 |
West Africa | 2,692 |  |  | 3,243 |  |  | 3,687 |
Middle East | 2,249 |  |  | 1,633 |  |  | 1,880 |
Europe | 461 |  |  | 1,348 |  |  | 5,132 |
Asia Pacific | 922 |  |  | 1,388 |  |  | 1,364 |
Other | (10,542 | ) |  | 812 |  |  | 1,495 |
Total foreign income tax expense (benefit) | $ | (2,957 | ) |  | $ | 13,893 |  |  | $ | 14,717 |
A reconciliation of the differences between the income tax provision computed at the 21% U.S. statutory rate in effect at December 31, 2018 and the reported provision for income taxes for the periods indicated is as follows (in thousands):
| Year Ended December 31,
| 2018 |  | 2017 |  | 2016
Income tax expense (benefit) at statutory rate | $ | (19,673 | ) |  | $ | (30,289 | ) |  | $ | (63,603 | )
Branch profits tax | (4,267 | ) |  | (4,871 | ) |  | (3,805 | )
State taxes, net of federal benefit | (27 | ) |  | 2,405 |  |  | (674 | )
Restricted stock units tax shortfall | 1,025 |  |  | 1,651 |  |  | 2,758 |
Taxes on foreign earnings at less than the U.S. statutory rate | 13,095 |  |  | (22,464 | ) |  | 30,737 |
Effect of tax rate change | (2,929 | ) |  | 23,843 |  |  | — |
Effect of moving activity to higher tax rate jurisdiction | (14,620 | ) |  | — |  |  | — |
Management fee charged to international operations | 1,515 |  |  | 1,213 |  |  | — |
Tax effect of TRA derecognition | — |  |  | 46,874 |  |  | — |
Establishment of valuation allowances | 22,892 |  |  | 51,911 |  |  | 2,644 |
Return-to-provision adjustments | (521 | ) |  | 3,551 |  |  | (1,130 | )
Noncontrolling interest | — |  |  | — |  |  | 7,367 |
Other | 560 |  |  | (906 | ) |  | 63 |
Total income tax expense (benefit) | $ | (2,950 | ) |  | $ | 72,918 |  |  | $ | (25,643 | )
A reconciliation using the Netherlands statutory rate was not provided as there are no significant operations in the Netherlands. Deferred tax assets and liabilities are recorded for the anticipated future tax effects of temporary differences between the financial statement basis and tax basis of our assets and liabilities and are measured using the tax rates and laws expected to be in effect when the differences are projected to reverse. A valuation allowance is recorded when it is not more likely than not that some or all the benefit from the deferred tax asset will be realized. Significant components of deferred tax assets and liabilities are as follows (in thousands):
| December 31,
| 2018 |  | 2017
Deferred tax assets |  |  |
Foreign net operating loss | $ | 13,290 |  |  | $ | 13,023 |
U.S. net operating loss | 76,349 |  |  | 52,289 |
Research and development credit | 609 |  |  | 297 |
TRA | — |  |  | 566 |
Intangibles | 5,933 |  |  | 5,935 |
Inventory | 2,350 |  |  | 1,488 |
Property and equipment | 14,621 |  |  | — |
Investment in partnership | 23,931 |  |  | 20,248 |
Other | 773 |  |  | 419 |
Valuation allowance | (84,972 | ) |  | (60,524 | )
Total deferred tax assets | 52,884 |  |  | 33,741 |
Deferred tax liabilities |  |  |
Investment in partnership | (27,352 | ) |  | (23,594 | )
Property and equipment | (3,652 | ) |  | (4,293 | )
Goodwill | (7,259 | ) |  | (5,854 | )
Other | (221 | ) |  | (229 | )
Total deferred liabilities | (38,484 | ) |  | (33,970 | )
Net deferred tax assets (liabilities) | $ | 14,400 |  |  | $ | (229 | )
As of December 31, 2018, we have income tax net operating loss (“NOL”) carryforwards related to both our U.S. and foreign operations of approximately $326.7 million. In addition, we have research and development tax credit carryforwards of approximately $0.6 million. The ultimate utilization of the NOLs and research and development credits depend on the ability to generate sufficient taxable income in the appropriate tax jurisdiction. These tax attributes expire as follows:
Year of Expiration |  | U.S. NOLs |  | Foreign NOLs |  | R&D Credits
2019 - 2023 |  | $ | — |  |  | $ | 9,022 |  |  | $ | — |
2024 - 2028 |  | — |  |  | 1,901 |  |  | — |
2028 - 2038 |  | 194,381 |  |  | 208 |  |  | 609 |
Does not expire |  | 78,315 |  |  | 42,852 |  |  | — |
|  | $ | 272,696 |  |  | $ | 53,983 |  |  | $ | 609 |
The valuation allowance increased from $60.5 million to $85.0 million during 2018 as a result of accumulated tax losses in both the U.S. and various foreign tax jurisdictions. We evaluated all available evidence and determined that it is more likely than not that these losses will not be realized. It is our intention that all cash and earnings of our subsidiaries as of December 31, 2018 are permanently reinvested and will be used to meet operating cash flow needs. Existing plans do not demonstrate a need to repatriate foreign cash to fund parent company activity, however, should we determine that parent company funding is required, we estimate that any such cash needs may be met without adverse tax consequences. As of December 31, 2018 and 2017, we had total gross unrecognized tax benefits of $0.3 million and $0.2 million, respectively. Substantially all of the uncertain tax positions, if recognized in the future, would impact our effective tax rate. We have elected to classify interest and penalties incurred on income taxes as income tax expense. We file income tax returns in the U.S. and various international tax jurisdictions. As of December 31, 2018, our U.S. tax returns remain open to examination for the tax years 2017 through 2018, and the major foreign taxing jurisdictions to which we are subject to tax are open to examination for the tax years 2010 through 2018.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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