INCOME TAXES

The components of the provision for income tax expense for the years ended December 31 are as follows (in millions):



	2014			2013			2012
Federal:
Current	$	—		$	—		$	—
Deferred	29.6			30.9			13.6
Total Federal	29.6			30.9			13.6
State:
Current	(1.4		)	4.1			—
Deferred	(2.5		)	(9.8		)	6.1
Total State	(3.9		)	(5.7		)	6.1

Valuation allowance	(4.8		)	8.8			0.1
Expense for uncertain tax positions	—			(1.0		)	—
Income tax expense	$	20.9		$	33.0		$	19.8

A reconciliation of income tax expense at the applicable federal statutory income tax rate to the tax provision as reported for the years ended December 31 are as follows (in millions):



	2014			2013			2012
Federal income tax expense at statutory rate	$	29.8		$	28.4		$	17.9
State income tax expense, net of federal benefit	2.6			2.7			1.6
Valuation allowance	(4.8		)	8.8			0.1
Adjustment to deferred tax liabilities	(3.1		)	(8.8		)	(5.5		)
Change in State tax rate	(4.2		)	—			4.3
Permanent tax adjustments	2.0			1.7			1.2
Other	(1.4		)	0.2			0.2
Income tax expense	$	20.9		$	33.0		$	19.8

The components of deferred tax assets and liabilities as of December 31 are as follows (in millions):



	2014			2013
DEFERRED TAX ASSETS:
Current:
Nondeductible accruals and deferred revenue	24.6			24.2
Total	24.6			24.2
Valuation allowance	(8.2		)	(8.5		)

Total current deferred tax assets	$	16.4		$	15.7

Noncurrent:
Nondeductible accruals and deferred revenue	$	27.5		$	21.1
Federal and state net operating loss carryforwards, net of liability for uncertain tax positions	453.2			443.4
AMT credits	6.1			6.1
Prepaid rent	8.5			8.6
Deferred credits and other non-current liabilities	5.7			17.4
Other	22.8			23.2
Total	523.8			519.8
Valuation allowance	(174.7		)	(182.8		)

Total noncurrent deferred tax assets	349.1			337.0

DEFERRED TAX LIABILITIES:
Noncurrent:
Other intangible assets	(3.4		)	(3.4		)
Maintenance deposits	(20.2		)	(14.0		)
Accelerated depreciation and fixed asset basis differences for tax purposes	(609.5		)	(580.0		)

Total noncurrent deferred tax liabilities	(633.1		)	(597.4		)
Total net noncurrent deferred tax liabilities	$	(284.0	)	$	(260.4	)

The Company monitors ongoing tax cases related to its unrecognized tax benefits. The unrecognized tax benefits, which if recognized, would impact the effective tax rate. The Company does not anticipate that total unrecognized tax benefits would significantly change within the next 12 months. The following table reconciles the Company’s tax liability for uncertain tax positions for the year ended December 31 (in millions):



	2014		2013			2012
Balance at January 1,	$	7.1	$	8.1		$	8.1
Additions for tax positions taken in prior years	—		—			—
Reductions for tax positions of prior years	—		(1.0		)	—
Balance at December 31,	$	7.1	$	7.1		$	8.1

The following table reconciles the Company’s valuation allowance for the year ended December 31 (in millions):



	2014			2013		2012
Balance at January 1,	$	191.3		$	182.5	$	182.5
Reduction for net operating losses previously reserved that were utilized or expired	(3.6		)	—		(0.1		)
Additions (deductions) for current year change in estimate	(4.8		)	8.8		0.1
Balance at December 31,	$	182.9		$	191.3	$	182.5

The future use of the net operating losses (“NOLs”) acquired from previous acquisitions are limited based on Internal Revenue Code Section 382 due to the change in control that occurred from the acquisitions. Management evaluated the deferred tax assets and determined that more likely than not, certain deferred tax assets would not be utilized and therefore a valuation allowance was required. The net operating losses generated by the Company after the change in control date, generally do not have a related valuation allowance. As of December 31, 2014, the Company has federal NOL carryforwards totaling $1.3 billion, which begin expiring in 2015, and of which approximately $398.0 million are not expected to be realized prior to expiration mostly due to the limitations under Internal Revenue Code Section 382. Therefore, a valuation allowance has been recorded for these net operating loss carryforwards. In 2014, the Company reduced its state effective tax rate, which decreased its net deferred tax asset by approximately $4.2 million. In addition, the Company decreased its valuation allowance related to net operating losses by approximately $8.4 million, of which $3.6 million was attributable to losses that were utilized or expired.

Deferred tax assets include benefits expected to be realized from the utilization of alternative minimum tax (“AMT”) credit carryforwards of $6.1 million, which do not expire. A valuation allowance of $5.2 million has been recorded against AMT credit carryforwards that were acquired from previous acquisitions as these credits are not expected to be realized.

The Company's federal income tax returns for tax years after 1998 remain subject to examination by the Internal Revenue Service (“IRS”) and state taxing jurisdictions. The Company concluded its audit by the IRS for the 2009 tax year in 2012. The Company's NOL's from prior tax years would remain subject to examination by major tax jurisdictions due to our net operating loss carryforwards.