(13) Income Taxes

For the years ended December 31, 2014, 2015, and 2016, income tax expense (benefit) from continuing operations consisted of the following (in thousands):


	Year ended December 31,
	2014		2015		2016
Current income tax benefit	$	—		—		(10,984)
Deferred income tax expense (benefit)		445,672		575,890		(485,392)
Total income tax expense (benefit) from continuing operations	$	445,672		575,890		(496,376)

Income tax expense (benefit) from continuing operations differs from the amount that would be computed by applying the U.S. statutory federal income tax rate of 35% to income from continuing operations for the years ended December 31, 2014, 2015, and 2016 as a result of the following (in thousands):


	Year ended December 31,
	2014		2015		2016
Federal income tax expense (benefit)	$	391,754		544,560		(436,038)
State income tax expense (benefit), net of federal benefit		25,545		26,983		(20,364)
Nondeductible equity-based compensation		29,141		16,441		3,691
Noncontrolling interest in Antero Midstream Partners LP		(787)		(13,521)		(34,780)
Change in valuation allowance		(120)		570		(10,852)
Other		139		857		1,967
Total income tax expense from continuing operations	$	445,672		575,890		(496,376)

For the years ended December 31, 2014, 2015, and 2016, income tax expense (benefit) was allocated to continuing and discontinued operations as follows (in thousands):


	Year ended December 31,
	2014		2015		2016
Continuing operations	$	445,672		575,890		(496,376)
Discontinued operations and sale of discontinued operations		1,354		—		—
Total income tax expense	$	447,026		575,890		(496,376)

Deferred income taxes reflect the impact of temporary differences between assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The tax effect of the temporary differences giving rise to net deferred tax assets and liabilities at December 31, 2015 and 2016 is as follows (in thousands):


	2015		2016
Deferred tax assets:
Net operating loss carryforwards	$	521,617		562,355
Minimum tax credit carryforward		11,000		—
Equity-based compensation		16,130		20,344
Other		18,633		16,483
Total deferred tax assets		567,380		599,182
Valuation allowance		(27,209)		(16,357)
Net deferred tax assets		540,171		582,825
Deferred tax liabilities:
Unrealized gains on derivative instruments		1,167,983		605,487
Oil and gas properties		708,664		866,003
Investment in Antero Midstream Partners LP		34,210		54,052
Other		—		7,500
Total deferred tax liabilities		1,910,857		1,533,042
Net deferred tax liabilities	$	(1,370,686)		(950,217)

In assessing the realizability of deferred tax assets, management considers whether some portion or all of the deferred tax assets will be realized based on a more-likely-than-not standard of judgment. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the projections of future taxable income over the periods in which the deferred tax assets are deductible, management believes that the Company will not realize the benefits of certain of these deductible differences and has recorded a valuation allowance of approximately $27 million and $16 million at December 31, 2015 and 2016, respectively related to NOL carryforwards primarily attributable to states where the Company no longer operates. The valuation allowance was reduced in 2016 due to a change in the estimated amount of state NOLs that can be utilized in the future. The amount of the deferred tax asset considered realizable could be further reduced in the near term if estimates of future taxable income during the carryforward period are revised.

The calculation of the Company’s tax liabilities involves uncertainties in the application of complex tax laws and regulations. The Company gives financial statement recognition to those tax positions that it believes are more‑likely-than‑not to be sustained upon examination by the Internal Revenue Service or state revenue authorities. In 2016, the Company reversed unrecognized benefits recorded in prior years due to the expiration of the applicable statutes of limitations. The removal of the unrecognized benefits does not impact the Company’s 2016 effective tax rate. The Company will continue to monitor potential uncertain tax positions, but does not anticipate any changes within the next year. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:


	2014		2015		2016
Balance at beginning of year	$	11,000		11,000		11,000
Reductions for tax positions of prior years		—		—		(11,000)
Balance at end of year	$	11,000		11,000		—

As of December 31, 2016, the Company’s corporate subsidiaries have U.S. Federal and state net operating loss carryforwards (NOLs) of $1.5 billion and $1.4 billion, respectively, which expire at various dates from 2024 to 2036.

The tax years 2013 through 2016 remain open to examination by the U.S. Internal Revenue Service. The Company and its subsidiaries file tax returns with various state taxing authorities; these returns remain open to examination for tax years 2012 through 2016.