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

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

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



	Year Ended December 31,
	2016			2015			2014
Current:
Federal	$	—		$	—		$	—
State	—			—			—
Foreign	(54		)	(1,970		)	(4,143		)
Total current	(54		)	(1,970		)	(4,143		)

Deferred:
Federal	—			—			—
State	—			—			—
Foreign	(1,854		)	2,066			—
Total deferred	(1,854		)	2,066			—
Total income tax benefit (provision)	$	(1,908	)	$	96		$	(4,143	)

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



	Year Ended December 31,
	2016		2015		2014
U.S. federal statutory tax rate	35.0	%	35.0	%	35.0	%
Non-controlling interest	(2.1	)%	(2.3	)%	(4.8	)%
State tax rate	1.8	%	1.9	%	4.3	%
Uncertain tax position	—	%	—	%	(12.5	)%
Net impact of non-U.S. taxes	(1.2	)%	(1.3	)%	(2.0	)%
Valuation allowance	(27.5	)%	(30.1	)%	(19.8	)%
Nondeductible interest expense	(6.6	)%	(2.6	)%	—	%
Other	0.3	%	(0.5	)%	(0.6	)%
Effective tax rate as reported	(0.3	)%	0.1	%	(0.4	)%

Significant components of our deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows (in thousands):



	December 31,
	2016			2015
Deferred tax assets
Net operating loss carryforwards and credits
Federal and foreign	$	1,060,026		$	862,218
State	183,153			166,321
Book deferred gain	77,182			77,182
Share-based compensation expense	52,727			71,693
Property, plant and equipment	—			12,957
Derivative instruments	46,754			54,052
Long-term debt	17,676			8,725
Other	13,511			5,641
Less: valuation allowance	(1,251,959		)	(1,070,309		)
Total deferred tax assets	199,070			188,480

Deferred tax liabilities
Investment in limited partnership	(76,265		)	(57,466		)
Convertible debt	(118,341		)	(128,948		)
Property, plant and equipment	(4,464		)	—
Total deferred tax liabilities	(199,070		)	(186,414		)

Net deferred tax assets	$	—		$	2,066

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



	Year Ended December 31,
	2016			2015
Balance at beginning of the year	$	103,640		$	104,491
Additions based on tax positions related to current year	—			—
Additions for tax positions of prior years	—			—
Reductions for tax positions of prior years	(728		)	(851		)
Settlements	—			—
Balance at end of the year	$	102,912		$	103,640