Cobalt International Energy, Inc.
Notes to Consolidated Financial Statements (Continued)
16. Income Taxes (Continued)
Year Ended December 31,
2014
2013
2012
($ in thousands)
Income tax expense (benefit) at the
federal statutory rate . . . . . . . . . . . . $(178,767)
35.0% $(206,159)
35.0% $(99,050) 35.0%
State income taxes, net of federal
income tax benefit . . . . . . . . . . . . .
(828)
0.2% (489)
0.1% (512)
0.2%
Foreign income tax . . . . . . . . . . . . . . .
(111,151)
21.8% (70,994)
12.1% 4,447
1.6%
Other . . . . . . . . . . . . . . . . . . . . . . . .
9,098
1.8% 366
0.1% 2,678
0.9%
Valuation allowance(1) . . . . . . . . . . . .
281,648
55.2% 277,276
47.1% 92,437 32.7%
$
— —% $
— —% $ — —%
(1) The change in the deferred tax asset valuation allowance of $277.3 million for the year end
December 31, 2013, excludes a $85.3 million net decrease in valuation allowance due to previously
unrecorded foreign deferred tax assets and a deferred tax liability related to the Company’s
convertible debt instrument that did not impact the rate reconciliation.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax
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