Cheniere Energy, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Components of Income Tax Expense (Benefit)

Income tax provision included in our reported net loss consisted of the following (in thousands):



	Year Ended December 31,
	2013		2012			2011
Current:
Federal	$	—	$	—		$	—
State	—		—			—
Foreign	4,082		145			277
Total current	4,082		145			277

Deferred:
Federal	—		—			—
State	—		—			—
Foreign	258		(141		)	(117		)
Total deferred	258		(141		)	(117		)
Total income tax provision	$	4,340	$	4		$	160

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:



	Year Ended December 31,
	2013		2012		2011
U.S. statutory tax rate	35.0	%	35.0	%	35.0	%
Minority interest	(3.3	)%	(1.4	)%	(0.8	)%
State tax benefit (net of federal benefits)	4.5	%	2.7	%	6.2	%
Foreign income tax provision	(0.8	)%	—	%	—	%
Deferred tax asset valuation reserve	(34.3	)%	(33.2	)%	(42.1	)%
Other	(1.9	)%	(3.1	)%	1.7	%
Effective tax rate as reported	(0.8	)%	—	%	—	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities at December 31, 2013 and 2012 are as follows (in thousands):



	December 31,
	2013			2012
Deferred tax assets
Net operating loss carryforwards ⁽¹⁾
Federal	$	608,631		$	476,228
State	111,624			83,242
Book deferred gain	77,182			81,388
Share-based compensation expense	24,089			5,679
Other	31,191			17,864
Total deferred tax assets	$	852,717		$	664,401

Deferred tax liabilities
Investment in limited partnership	$	(109,884	)	$	(94,434	)
Other	(142		)	(307		)
Total deferred tax liabilities	$	(110,026	)	$	(94,741	)

Net deferred tax assets	742,691			569,660
Less: net deferred tax asset valuation allowance ⁽²⁾	(742,691		)	(569,402		)
Total net deferred tax asset	$	—		$	258

Summary of Income Tax Contingencies

Changes in the balance of unrecognized tax benefits are as follows (in thousands):



	Year Ended December 31,
	2013			2012
Balance at beginning of the year	$	19,773		$	135,349
Additions based on tax positions related to current year	—			—
Additions for tax positions of prior years	2,162			—
Reductions for tax positions of prior years	(2,451		)	(115,576		)
Settlements	—			—
Balance at end of the year	$	19,484		$	19,773

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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