KOSMOS ENERGY LTD. Notes to Consolidated Financial Statements (Continued) 13. Income Taxes (Continued) The effective tax rate for the United States is approximately 433%, 179% and 220% for the years ended December 31, 2017, 2016 and 2015, respectively. The effective tax rate in the United States is impacted by the effect of writing-down our deferred tax assets as a result of the change in tax rate under the Act and the sum of equity-based compensation tax shortfalls and tax windfalls equal to the difference between the income tax benefit recognized for financial statement reporting purposes compared to the income tax benefit realized for tax return purposes. The effective tax rate for Ghana is approximately 49%, 23% and 35% for the years ended December 31, 2017, 2016 and 2015, respectively. The effective tax rate in Ghana is impacted by non-deductible expenditures, including amounts 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 temporary differences become deductible. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows: December 31, 2017 2016 (In thousands) Deferred tax assets: Foreign capitalized operating expenses . . . . . . . . . . . . . . . $ 68,218 $ 69,804 Foreign net operating losses . . . . . . . . . . . . . . . . . . . . . . . 25,307 36,352 Equity compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,783 30,752 Unrealized derivative losses . . . . . . . . . . . . . . . . . . . . . . . 33,963 — Asset retirement obligation and other . . . . . . . . . . . . . . . . 24,784 33,744 Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 173,055 170,652 Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93,525) (87,517) Total deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . 79,530 83,135 Deferred tax liabilities: Depletion, depreciation and amortization related to property and equipment . . . . . . . . . . . . . . . . . . . . . . . . (533,561) (526,945) Unrealized derivative gains . . . . . . . . . . . . . . . . . . . . . . . — (584) Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (533,561) (527,529) Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . $(454,031) $(444,394) 143