
	INCOME TAXES

The income tax expense rate for the three and six months ended June 30, 2014 and 2013 was lower than the blended statutory rate of 38.25% primarily because of the non-taxability of certain income items. However, the effective tax rate for the three and six months ended June 30, 2014 was higher than the comparable periods in 2013 primarily because of a slight decrease in the amount of nontaxable items relative to pretax income, and an accrual of $2.3 million of interest expense included in income tax expense to settle certain income tax examinations.

Net deferred tax assets were approximately $239 million at June 30, 2014 and $304 million at December 31, 2013. We evaluate net deferred tax assets on a regular basis to determine whether an additional valuation allowance is required. Based on this evaluation, and considering the weight of the positive evidence compared to the negative evidence, we have concluded that an additional valuation allowance is not required as of June 30, 2014.