Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154 Page 155 Page 156 Page 157 Page 158 Page 159 Page 160 Page 161 Page 162 Page 163 Page 164 Page 165 Page 166 Page 167 Page 168 Page 169 Page 170 Page 171 Page 172 Page 173 Page 174 Page 175 Page 176 Page 177 Page 178 Page 179 Page 180 Page 181 Page 182KOSMOS ENERGY LTD. Notes to Consolidated Financial Statements (Continued) 12. Income Taxes (Continued) Our reconciliation of income tax expense (benefit) computed by applying our Bermuda statutory rate and the reported effective tax rate on income (loss) from continuing operations is as follows: Years Ended December 31, 2016 2015 2014 (In thousands) Tax at Bermuda statutory rate . . . . . . . . . . . . . . $ — $ — $ — Foreign income (loss) taxed at different rates . . . (57,898) 94,184 266,993 Change in valuation allowance and the expiration of fully valued deferred tax assets . . . . . . . . . . 29,263 40,600 16,401 Non-deductible and other items . . . . . . . . . . . . . 12,347 1,885 8,957 Tax shortfall on equity-based compensation . . . . . 5,504 18,603 6,547 Total tax expense (benefit) . . . . . . . . . . . . . . . . . . $(10,784) $155,272 $298,898 Effective tax rate(1) . . . . . . . . . . . . . . . . . . . . . . . 4% 182% 52% (1) The effective tax rate during the years ended December 31, 2016, 2015 and 2014 were impacted by losses of $121.4 million, $153.5 million and $159.9 million, respectively, incurred in jurisdictions in which we are not subject to taxes and therefore do not generate any income tax benefits. The effective tax rate for the United States is approximately 179%, 220% and 81% for the years ended December 31, 2016, 2015 and 2014, respectively. The effective tax rate in the United States is impacted by the effect of equity-based compensation tax shortfalls equal to the excess income tax benefit recognized for financial statement purposes over the income tax benefit realized for tax return purposes. The effective tax rate for Ghana is approximately 23%, 35% and 36% for the years ended December 31, 2016, 2015 and 2014, respectively. The effective tax rate in Ghana is impacted by non-deductible expenditures associated with the damage to the turret bearing, which we expect to recover from insurance proceeds. Any such insurance recoveries would not be subject to income tax. Our operations in other foreign jurisdictions have a 0% effective tax rate because they reside in countries with a 0% statutory rate or we have incurred losses in those countries and have full valuation allowances against the corresponding net deferred tax assets. Deferred tax assets and liabilities, which are computed on the estimated income tax effect of temporary differences between financial and tax bases in assets and liabilities, are determined using the tax rates expected to be in effect when taxes are actually paid or recovered. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those 139