Entity information:
Income Taxes
Income taxes have been provided for based upon the tax laws and rates in countries in which our operations are conducted and income is earned. The Company received an assurance from the Bermuda Minister of Finance that it would be exempted from local income, withholding and capital gains taxes until March 2035. Consequently, the provision for income taxes relates to income earned by certain subsidiaries of the Company which are located in, or earn income in, jurisdictions that impose income taxes, primarily the United States and Ireland.
The sources of income from continuing operations before income taxes and earnings of unconsolidated equity method investment for the years ended December 31, 2017, 2016 and 2015 were as follows:
 
Year Ended December 31,
 
2017
 
2016
 
2015
U.S. operations
$
2,801

 
$
2,230

 
$
2,433

Non-U.S. operations
143,504

 
154,275

 
125,810

Income from continuing operations before income taxes and earnings of unconsolidated equity method investment
$
146,305

 
$
156,505

 
$
128,243




The components of the income tax provision from continuing operations for the year ended December 31, 2017, 2016 and 2015 consisted of the following:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
United States:
 
 
 
 
 
Federal
$
6,503

 
$
2,004

 
$
4,167

State
1,913

 
587

 
994

Non-U.S.
6,574

 
3,560

 
14,499

Current income tax provision
14,990

 
6,151

 
19,660

Deferred:
 
 
 
 
 
United States:
 
 
 
 
 
Federal
(5,474
)
 
1,350

 
829

State
(1,161
)
 
(157
)
 
57

Non-U.S.
(2,313
)
 
4,963

 
(7,775
)
Deferred income tax provision (benefit)
(8,948
)
 
6,156

 
(6,889
)
Total
$
6,042

 
$
12,307

 
$
12,771


Significant components of the Company’s deferred tax assets and liabilities at December 31, 2017, 2016 and 2015 consisted of the following:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Deferred tax assets:
 
 
 
 
 
Non-cash share-based payments
$
1,899

 
$
2,183

 
$
1,483

Net operating loss carry forwards
22,804

 
47,538

 
52,007

Other
1,272

 
1,902

 
761

Total deferred tax assets
25,975

 
51,623

 
54,251

Deferred tax liabilities:
 
 
 
 
 
Accelerated depreciation
(62,379
)
 
(92,734
)
 
(87,716
)
Other
354

 
(1,227
)
 
(442
)
Total deferred tax liabilities
(62,025
)
 
(93,961
)
 
(88,158
)
Net deferred tax liabilities
$
(36,050
)
 
$
(42,338
)
 
$
(33,907
)

The Company had approximately $33,424 of net operating loss (“NOL”) carry forwards available at December 31, 2017 to offset future taxable income subject to U.S. graduated tax rates. If not utilized, these carry forwards will expire between 2032 through 2037. The Company also had NOL carry forwards of $247,053 with no expiration date to offset future Irish and Mauritius taxable income. In 2017, NOLs of $223,758 were utilized as a result of gains from sale and transfer of aircraft in Singapore. We have a five-year Singapore corporate tax rate reduction from the statutory rate of 17% to 8% through June 30, 2022. Deferred tax assets and liabilities are included in Other assets and Accounts payable and accrued liabilities, respectively, in the accompanying Consolidated Balance Sheets.
We do not expect to incur income taxes on future distributions of undistributed earnings of non-U.S. subsidiaries and accordingly, no deferred income taxes have been provided for the distributions of such earnings. As of December 31, 2017 we have elected to permanently reinvest our accumulated undistributed U.S. earnings of $11,404. Accordingly, no U.S. withholding taxes have been provided. Withholding tax of $3,421 would be due if such earnings were remitted.
All of our aircraft-owning subsidiaries that are recognized as corporations for U.S. tax purposes are non-U.S. corporations. These non-U.S. subsidiaries generally earn income from sources outside the United States and typically are not subject to U.S. federal, state or local income taxes unless they operate within the U.S., in which case they may be subject to federal, state and local income taxes. The aircraft owning subsidiaries resident in Ireland, Mauritius and Singapore are subject to tax in those respective jurisdictions.
We have a U.S-based subsidiary which provides management services to our non-U.S. subsidiaries and is subject to U.S. federal, state and local income taxes. We also have Ireland and Singapore based subsidiaries which provide management services to our non-U.S. subsidiaries and are subject to tax in those respective jurisdictions.
Differences between statutory income tax rates and our effective income tax rates applied to pre-tax income from continuing operations at December 31, 2017, 2016 and 2015 consisted of the following:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Notional U.S. federal income tax expense at the statutory rate:
$
51,207

 
$
54,777

 
$
44,885

U.S. state and local income tax, net
168

 
182

 
221

Non-U.S. operations:
 
 
 
 
 
Bermuda
(21,517
)
 
(31,250
)
 
(20,789
)
Ireland
(2,348
)
 
(276
)
 
(3,073
)
Singapore
(15,839
)
 
(7,519
)
 
(5,650
)
Other low tax jurisdictions
(5,581
)
 
(3,877
)
 
(3,395
)
Non-deductible expenses in the U.S.
(236
)
 
525

 
737

Other
188

 
(255
)
 
(165
)
Provision for income taxes
$
6,042

 
$
12,307

 
$
12,771


The provision for income taxes includes the net deferred tax benefit of $4,063 relating to the transfer of aircraft from Singapore and the Singapore rate reduction from 10% to 8%. The income tax provision was also reduced by $2,779 for the reduction in the Federal Rate resulting from the passage of the Tax Act.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. We did not have any unrecognized tax benefits.
We conduct business globally and, as a result, the Company and its subsidiaries or branches are subject to foreign, U.S. federal and various state and local income taxes, as well as withholding taxes. In the normal course of business the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Ireland and the United States. With few exceptions, the Company and its subsidiaries or branches remain subject to examination for all periods since inception.
Our policy is that we will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. We did not accrue interest or penalties associated with any unrecognized tax benefits, nor was any interest expense or penalty recognized during the year.