The majority of our non-U.S. based operations are subject to foreign tax systems that provide significant incentives to qualified shipping activities. Our U.K. and Norway based vessels are taxed under “tonnage tax” regimes. Our qualified Singapore based vessels are exempt from Singapore taxation through  

with extensions available in certain circumstances beyond The qualified Singapore vessels are also subject to specific qualification requirements which if not met could jeopardize our qualified status in Singapore. The tonnage tax regimes provide for a tax based on the net tonnage weight of a qualified vessel. These beneficial foreign tax structures continued to result in our earnings incurring significantly lower taxes than those that would apply under the U.S. statutory tax rates or if we were not a qualified shipping company in those foreign jurisdictions.

 

Should our operational structure change or should the laws that created these shipping tax regimes change, we could be required to provide for taxes at rates much higher than those currently reflected in our financial statements. Additionally, if our pre-tax earnings in higher tax jurisdictions increase, there could be a significant increase in our annual effective tax rate. Any such increase could cause volatility in the comparisons of our effective tax rate from period to period.

 

U.S. foreign tax credits can be carried forward for years. We have  

million of such foreign tax credit carryforwards that begin to expire in As of we had an million of valuation allowance for these credits. We have considered estimated future taxable income in the relevant tax jurisdictions to utilize these tax credits and have considered what we believe to be ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. This information is based on estimates and assumptions including projected taxable income. If these estimates and related assumptions change in the future, or if we determine that we would not be able to realize other deferred tax assets in the future, an adjustment to the valuation allowance would be recorded in the period such determination was made.

 

For the year ended we increased by million the U.S. federal income tax provision for the amount of employee stock-based compensation less than book cost. This increase reduces a long term deferred tax asset for the decrease to our federal income tax net operating loss. In the future, we are able to recognize this tax benefit only to the extent that it reduces our income taxes payable as a current year deduction or through utilization of prior years' net operating losses.

 

Income (loss) before income taxes attributable to domestic and foreign operations was (in thousands):

The components of our tax provision (benefit) attributable to income before income taxes are as follows for the year ended (in thousands):

 

 

(a)  Includes income tax effects determined under a more likely than not, or greater than probability, threshold and the book deferred tax effect related to intercompany asset sales.

 

The mix of our operations within various taxing jurisdictions affects our overall tax provision. The difference between the provision at the statutory U.S. federal tax rate and the tax provision attributable to income before income taxes in the accompanying consolidated statements of operations is as follows:

 

Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The components of the net deferred tax assets and liabilities at  

and were as follows:

 

The change in the total valuation allowance for the year ended from was an increase of million. As of  

we had net operating loss carryforwards, or NOLs, for income tax purposes totaling  

million in the U.S., million in Mexico, million in the U.K.,  

million in Brazil, and  

million in Norway that are, subject to certain limitations, available to offset future taxable income. We have sufficient deferred tax liability reversals for depreciation and the remaining repatriation of foreign earnings that we expect to fully utilize the U.S. NOLs. The U.S. NOLs will begin to expire beginning in It is more likely than not that the Norway NOLs and the Brazilian NOLs will not be utilized and a full valuation allowance has been established for such NOLs. Based on future expected U.S. taxable income, as of we have recorded  

million of valuation allowance against U.S. foreign tax credits.

 

Deferred income tax assets and liabilities based on classification as current, or short-term, and long-term are included in our balance sheet as follows:

 

During we determined to repatriate all future foreign earnings and million of prior earnings of certain of our non-U.S. subsidiaries, thereby reducing our total permanently reinvested earnings. During we determined to repatriate an additional million of prior earnings of certain of our non-U.S. subsidiaries. The increase to our foreign repatriation strategy resulted in a non-cash tax charge in of approximately million. We have not provided for U.S. deferred taxes on the remaining permanently reinvested earnings of approximately million at If those earnings were repatriated, the incremental U.S. tax would be approximately based on current tax law. In addition, as of  

we had approximately million of cash held by our foreign subsidiaries which would be subject to U.S. tax upon repatriation.

 

Based on a more likely than not, or greater than probability, recognition threshold and criteria for measurement of a tax position taken or expected to be taken in a tax return, we evaluate and record in certain circumstances an income tax liability for uncertain income tax positions. Numerous factors contribute to our evaluation and estimation of our tax positions and related tax liabilities and/or benefits, which be adjusted periodically and ultimately be resolved differently than we anticipate. We also consider existing accounting guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. Accordingly, we continue to recognize income tax related penalties and interest in our provision for income taxes and, to the extent applicable, in the corresponding balance sheet presentations for accrued income tax assets and liabilities, including any amounts for uncertain tax positions included in other income taxes payable in the consolidated balance sheets and which total  

million at  

 

million at  

and million at In addition, the deferred tax asset was reduced by a million unrecognized tax benefit for an uncertain tax position.

 

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

 

 

 

We accrue interest and penalties related to unrecognized tax benefits in our provision for income taxes. At  

we had accrued interest and penalties related to unrecognized tax benefits of  

million. The amount of interest and penalties recognized in our tax provision for the year ended  

was  

million. The unrecognized tax benefits if recognized would affect the effective tax rate.

 

As of  

we be subject to examination in the U.S. for years after and in major foreign tax jurisdictions with open years from to