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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes |
Income Taxes | Note 12 Income Taxes Income (loss) from continuing operations before income taxes consisted of the following:
|  | Year Ended December 31, |
United States and Other Jurisdictions |  | 2016 |  | 2015 |  | 2014 |
|  | (In thousands) |
United States |  | $ | (728,589) |  | $ | (264,919) |  | $ | (598,121) |
Other jurisdictions |  |  | (469,486) |  |  | (162,616) |  |  | (6,494) |
Income (loss) from continuing operations before income taxes |  | $ | (1,198,075) |  | $ | (427,535) |  | $ | (604,615) |
Income tax expense (benefit) from continuing operations consisted of the following:
|  | Year Ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
|  | (In thousands) |
Current: |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | (19,937) |  | $ | 5,088 |  | $ | 183,840 |
Outside the U.S. |  |  | 31,846 |  |  | 76,550 |  |  | 109,072 |
State |  |  | 2,871 |  |  | 8,227 |  |  | 9,401 |
|  | $ | 14,780 |  | $ | 89,865 |  | $ | 302,313 |
Deferred: |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | (164,297) |  | $ | (182,518) |  | $ | (211,119) |
Outside the U.S. |  |  | (14,641) |  |  | 1,757 |  |  | (9,127) |
State |  |  | (22,673) |  |  | (7,142) |  |  | (19,401) |
|  | $ | (201,611) |  | $ | (187,903) |  | $ | (239,647) |
Income tax expense (benefit) |  | $ | (186,831) |  | $ | (98,038) |  | $ | 62,666 |
A reconciliation of our statutory tax rate to our worldwide effective tax rate consists of the following:
|  | Year Ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
|  | (In thousands) |
Income tax provision at statutory (Bermuda rate of 0%) |  | $ | — |  | $ | — |  | $ | — |
Taxes (benefit) on U.S. and other international earnings (losses) at greater than the Bermuda rate |  |  | (181,426) |  |  | (109,101) |  |  | (83,747) |
Increase (decrease) in valuation allowance |  |  | 17,865 |  |  | 22,655 |  |  | (9,934) |
Tax reserves and interest |  |  | (3,468) |  |  | (12,679) |  |  | 166,347 |
State income taxes (benefit) |  |  | (19,802) |  |  | 1,087 |  |  | (10,000) |
Income tax expense (benefit) |  | $ | (186,831) |  | $ | (98,038) |  | $ | 62,666 |
Effective tax rate |  |  | 15.6% |  |  | 22.9% |  |  | (10.4)% |
The change in our worldwide effective tax rate from 2015 to 2016 was attributable to the effect of the geographic mix of pre-tax earnings (losses), including greater losses in high-tax jurisdictions. The tax effect of impairments and our share of the net loss of CJES also contributed to the change. The change in our worldwide effective tax rate from 2014 to 2015 is primarily attributable to the tax effect of the geographic mix of pre-tax earnings (losses), including greater losses in higher-tax jurisdictions. The tax effect of impairments, our share of the net loss of CJES and internal restructuring also contributed to the change. The components of our net deferred taxes consisted of the following:
|  | December 31, |
|  | 2016 |  | 2015 |
|  | (In thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 1,826,656 |  | $ | 1,510,354 |
Equity compensation |  |  | 36,972 |  |  | 37,633 |
Deferred revenue |  |  | 31,082 |  |  | 19,422 |
Tax credit and other attribute carryforwards |  |  | 91,680 |  |  | 119,471 |
Insurance loss reserves |  |  | 5,118 |  |  | 6,192 |
Accrued interest |  |  | 357,285 |  |  | 288,687 |
Other |  |  | 115,909 |  |  | 135,185 |
Subtotal |  |  | 2,464,702 |  |  | 2,116,944 |
Valuation allowance |  |  | (1,807,728) |  |  | (1,560,162) |
Deferred tax assets: |  | $ | 656,974 |  | $ | 556,782 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation and amortization for tax in excess of book expense |  | $ | 288,086 |  | $ | 384,513 |
Variable interest investments |  |  | 641 |  |  | 718 |
Other |  |  | 11,154 |  |  | 16,009 |
Deferred tax liability |  | $ | 299,881 |  | $ | 401,240 |
Net deferred tax assets (liabilities) |  | $ | 357,093 |  | $ | 155,542 |
Balance Sheet Summary: |  |  |  |  |  |  |
Net noncurrent deferred asset (1) |  | $ | 366,588 |  | $ | 184,868 |
Net noncurrent deferred liability |  |  | (9,495) |  |  | (29,326) |
Net deferred asset (liability) |  | $ | 357,093 |  | $ | 155,542 |
| (1) |  | This amount is included in other long-term assets.
For U.S. federal income tax purposes, we have net operating loss (“NOL”) carryforwards of approximately $462.0 million that, if not utilized, will expire between 2019 and 2036. The NOL carryforwards for alternative minimum tax purposes are approximately $461.0 million. Additionally, we have NOL carryforwards in other jurisdictions of approximately $6.1 billion of which $383.0 million, if not utilized, will expire at various times from 2017 to 2036. We provide a valuation allowance against NOL carryforwards in various tax jurisdictions based on our consideration of existing temporary differences and expected future earning levels in those jurisdictions. We have recorded a deferred tax asset of approximately $1.67 billion as of December 31, 2016 relating to NOL carryforwards that have an indefinite life in several non‑U.S. jurisdictions. A valuation allowance of approximately $1.67 billion has been recognized because we believe it is more likely than not that substantially all of the deferred tax asset will not be realized. In addition, for state income tax purposes, we have NOL carryforwards of approximately $655.0 million that, if not utilized, will expire at various times from 2017 to 2036. The following is a reconciliation of our uncertain tax positions:
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
|  | (In thousands) |
Balance as of January 1 |  | $ | 188,376 |  |  | $ | 201,338 |  |  | $ | 47,552 |
Additions based on tax positions related to the current year |  |  | — |  |  |  | 384 |  |  |  | 167,107 | (4)
Additions for tax positions of prior years |  |  | 3,873 |  |  |  | — |  |  |  | 1,744 |
Reductions for tax positions for prior years |  |  | (11,547) | (1) |  |  | (9,234) | (2) |  |  | (6,843) |
Settlements |  |  | (1,447) |  |  |  | (4,112) | (3) |  |  | (8,222) | (5)
Balance as of December 31 |  | $ | 179,255 |  |  | $ | 188,376 |  |  | $ | 201,338 |
| (1) |  | Includes $7.2 million related to the expiration of statute of limitations in Australia, Algeria and Mexico, a $2.0 million reduction to Trinidad and $2.1 million related to foreign currency translation.
| (2) |  | Includes a $6.0 million reduction in Canada, Trinidad and the U.S., $2.0 million related to foreign currency translation and $1.1 million due to the expiration of statute of limitations.
| (3) |  | Includes $5.0 million related to settlements in Colombia, Ecuador, U.S. and Canada.
| (4) |  | Includes $166.0 million related to internal restructuring.
| (5) |  | Includes $7.6 million related to settlements in Algeria, Canada and Oman.
If the reserves of $179.3 million are not realized, this would favorably impact the worldwide effective tax rate. As of December 31, 2016, 2015 and 2014, we had approximately $9.2 million, $7.4 million and $19.2 million, respectively, of interest and penalties related to uncertain tax positions. During 2016, 2015 and 2014, we accrued and recognized estimated interest and penalties related to uncertain tax positions of approximately $0.6 million, $1.4 million and $6.1 million, respectively. We include potential interest and penalties related to uncertain tax positions within our global operations in the income tax expense (benefit) line item in our consolidated statements of income (loss). It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next twelve months primarily due to the completion of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits. We conduct business globally and, as a result, we file numerous income tax returns in the U.S. and non-U.S. jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including major jurisdictions such as Algeria, Canada, Mexico, Saudi Arabia and the United States. We are no longer subject to U.S. Federal income tax examinations for years before 2013 and non-U.S. income tax examinations for years before 2005.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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