10.INCOME TAXES

The income tax expense on income from continuing operations for the years ended December 31, 2015, 2014 and 2013 consisted of the following (in millions):

	Years Ended December 31,
	2015		2014		2013
Current:
Federal	$	22.6	$	45.5	$	(24.3	)
State	2.9		3.7		(1.0		)

Total	25.5		49.2		(25.3		)
Deferred:	49.3		2.7		57.5

Total income tax expense	$	74.8	$	51.9	$	32.2

Income tax expense for 2015, 2014, and 2013 differs from amounts computed by applying the statutory federal rate to income from continuing operations before income taxes for the following reasons:

	Years Ended December 31,
	2015		2014		2013
Computed federal income tax expense	35.0	%	35.0	%	35.0	%
State income tax	2.5	%	2.2	%	2.9	%
Valuation allowance	1.1	%	3.3	%	—
Foreign taxes	0.6	%	0.4	%	—
Deferred tax adjustment	1.1	%	(0.9	)%	—
Unrecognized tax benefits	0.4	%	(0.4	)%	(2.1	)%
Other — net	1.4	%	2.7	%	1.7	%

Effective income tax rate	42.1	%	42.3	%	37.5	%

The Company recorded a valuation allowance against operating losses related to a foreign subsidiary of $1.8 million and $4.1 million in 2015 and 2014, respectively, as the Company determined the tax benefits associated with such losses may not be realized in future periods. No valuation allowance was recorded in 2013. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31 of each year are as follows (in millions):

	As of December 31,
	2015			2014
Deferred tax assets:
Benefit plans	$	79.1		$	63.6
Federal net operating losses	68.0			—
Insurance reserves	15.4			11.4
State net operating losses	7.8			—
Foreign losses	5.7			4.1
Alternative minimum tax credits	3.6			1.5
Allowance for doubtful accounts	2.4			1.4
Other	1.9			0.8

Total deferred tax assets	183.9			82.8
Valuation allowance	(12.6		)	(4.1		)

Total Deferred tax assets, net of valuation allowance	171.3			78.7

Deferred tax liabilities:
Basis differences for property and equipment	300.8			252.7
Capital Construction Fund	95.6			106.9
Intangibles	53.0			3.8
Deferred revenue	11.8			10.1
Joint ventures and other investments	10.6			7.7
Reserves	10.0			(2.1		)

Total deferred tax liabilities	481.8			379.1

Deferred tax liability, net	$	310.5		$	300.4

Effective December 31, 2015, the Company early adopted ASU 2015-17 on a prospective basis as current net deferred tax assets are not significant to the Company’s consolidated balance sheets, and no prior periods were retrospectively adjusted (see Note 2). As of December 31, 2014, the Company’s net current deferred income taxes were $8.0 million.

The Company’s income taxes payable has been reduced by the tax benefits from share-based compensation. The Company receives an income tax benefit for exercised stock options calculated as the difference between the fair market value of the stock issued at the time of exercise and the option exercise price, tax effected. The Company also receives an income tax benefit for non-vested stock when it vests, measured as the fair market value of the stock at the time of vesting, tax effected. The net tax benefits from share-based transactions were $2.6 million and $0.8 million for 2015 and 2014, respectively, and the portion of the tax benefit related to the excess of the amount reported as the tax deduction over expense was reflected as an increase to additional paid in capital in the Consolidated Statements of Shareholders’ Equity.

Operating Loss and Tax Credit Carryforwards: The Company’s U.S. federal income tax net operating losses (“NOL”) carryforwards were $194.2 million, state income tax NOLs were $192.4 million, and foreign income tax NOLs were $20.2 million as of December 31, 2015, respectively. The Company’s foreign income tax NOLs were $14.6 million as of December 31, 2014 and the Company had no U.S. federal or state NOLs at that date. The Company’s U.S. federal and state income tax NOL’s will expire on various dates through December 31, 2034. The Company’s alternative minimum tax credit carryforwards were $3.6 million and $1.5 million as of December 31, 2015 and December 31, 2014, respectively, and have no expiration dates.

The Company recorded a valuation allowance of $12.6 million against all of the Company’s foreign income tax NOLs and a portion of the state income tax NOLs that it believes it is more likely than not that the benefit from these amounts will not be realized.

The U.S. federal and state income tax NOL carryforwards in the income tax returns filed included unrecognized tax benefits. The deferred tax assets recognized for those NOLs are presented net of these unrecognized tax benefits. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of the Company’s domestic NOL and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.

Unrecognized Tax Benefits: Total unrecognized benefits represent the amount that, if recognized, would favorably affect the Company’s effective rate in future periods. The Company does not expect a material change in gross unrecognized benefits in the next twelve months. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in millions):

Unrecognized Tax Benefits:	Amount
Balance at December 31, 2012	$	8.3
Additions for tax positions of prior years	2.0
Reductions for lapse of statute of limitations	(3.1		)

Balance at December 31, 2013	7.2
Additions for tax positions of prior years	0.5
Reductions for lapse of statute of limitations	(1.0		)

Balance at December 31, 2014	6.7
Additions for tax positions of prior years	1.5
Additions from unrecognized tax benefits acquired	14.4
Reductions for lapse of statute of limitations	(0.5		)

Balance at December 31, 2015	$	22.1

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. To the extent interest and penalties are not ultimately assessed with respect to the settlement of uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. Interest accrued related to the balance of unrecognized tax benefits totaled $0.4 million, $0.2 million and $0.3 million as of December 31, 2015, 2014 and 2013, respectively.

The Company is no longer subject to U.S. federal income tax audits for years before 2012, and substantially all material income tax matters have been concluded for years through 2010. The Company is routinely involved in State, local income and excise tax audits.