Income Taxes

Income tax (expense) benefit consists of:



	For the Year
	2015			2014			2013
	(In thousands)
Current tax provision:
U.S. Federal	$	8,579		$	(5,444	)	$	(6,004	)
State and other	47			(1,569		)	(2,066		)
	8,626			(7,013		)	(8,070		)
Deferred tax provision:
U.S. Federal	(38,366		)	(2,772		)	1,148
State and other	(2,895		)	1,128			(286		)
	(41,261		)	(1,644		)	862
Income tax (expense) benefit	$	(32,635	)	$	(8,657	)	$	(7,208	)

A reconciliation of the federal statutory rate to the effective income tax rate on continuing operations follows:



	For the Year
	2015		2014		2013
Federal statutory rate (benefit)	(35	%)	35	%	35	%
State, net of federal benefit	(1	)	1		4
Valuation allowance	54		—		—
Recognition of previously unrecognized tax benefits	—		—		(15	)
Noncontrolling interests	—		—		(5	)
Goodwill	—		1		—
Charitable contributions	—		(1	)	—
Oil and gas percentage depletion	—		(2	)	(2	)
Effective tax rate	18	%	34	%	17	%

Our 2015 effective tax rate includes a 54 percent detriment from a valuation allowance recorded against our deferred tax asset and our 2013 effective tax rate includes a 15 percent benefit from recognition of $6,326,000 of previously unrecognized tax benefits upon lapse of the statute of limitations for a previously reserved tax position.

Significant components of deferred taxes are:



	At Year-End
	2015			2014
	(In thousands)
Deferred Tax Assets:
Real estate	$	69,594		$	79,244
Employee benefits	15,752			17,352
Net operating loss carryforwards	13,827			3,012
Oil and gas properties	5,510			—
AMT credits	3,620			—
Income producing properties	—			364
Oil and gas percentage depletion carryforwards	3,616			3,471
Accruals not deductible until paid	911			1,111
Other assets	139			—
Gross deferred tax assets	112,969			104,554
Valuation allowance	(97,068		)	(384		)
Deferred tax asset net of valuation allowance	15,901			104,170
Deferred Tax Liabilities:
Oil and gas properties	—			(49,905		)
Undeveloped land	(7,588		)	(4,937		)
Convertible debt	(6,516		)	(7,816		)
Income producing properties	(2,257		)	—
Timber	(577		)	(888		)
Gross deferred tax liabilities	(16,938		)	(63,546		)
Net Deferred Tax Asset (Liability)	$	(1,037	)	$	40,624

At year-end 2015, we had approximately $37,500,000 and $43,900,000 of federal and state net operating loss carryforwards. Approximately $7,500,000 of the federal and $2,400,000 of the state net operating loss carryforwards were from our acquisition of Credo at third quarter 2012 and are subject to certain limitations. If not utilized, the federal carryforwards will expire in 2035 and the state carryforwards will expire in 2016 to 2035. We had approximately $9,800,000 of oil and gas percentage depletion carryforwards of which approximately $9,200,000 were a result of our acquisition of Credo and are subject to certain limitations. The percentage depletion and AMT credit carryforwards do not expire.

Our deferred tax asset on oil and gas properties includes the effect of impairments recorded in 2015.

Goodwill associated with our acquistion of Credo is not deductible for income tax purposes.

The increase in valuation allowance for the year 2015 was principally due to oil and gas impairments. In determining our valuation allowance, we assessed available positive and negative evidence to estimate whether sufficient future taxable income would be generated to permit use of the existing deferred tax asset. A significant piece of objective evidence was the cumulative loss incurred over the three-year period ended December 31, 2015, principally driven by impairments of oil and gas properties. Such evidence limited our ability to consider other subjective evidence, such as our projected future taxable income.

The amount of deferred tax asset considered realizable could be adjusted if negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence, such as our projected future taxable income.

We file income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. We are no longer subject to U.S. federal income tax examinations for years before 2012 and state examinations for years before 2011.

A reconciliation of the beginning and ending amount of tax benefits not recognized for book purposes is as follows:



	At Year-End
	2015		2014		2013
	(In thousands)
Balance at beginning of year	$	—	$	—	$	5,831
Reductions for tax positions of prior years	—		—		—
Reductions due to lapse of statute of limitations	—		—		(5,831		)
Balance at end of year that would affect the annual effective tax rate if recognized	$	—	$	—	$	—

We recognize interest accrued related to unrecognized tax benefits in income tax expense. In 2015, 2014 and 2013, we recognized approximately $0, $0 and $75,000 in interest expense. At year-end 2015 and 2014, we have no accrued interest or penalties.