Provision (Benefit) for Income Taxes

Income (Loss) before taxes is as follows (in thousands):



	Year Ended December 31,
	2014			2013		2012
Income (Loss) Before Income Taxes	$	(433,470	)	$	198	$	37,773

The following is an analysis of the consolidated income tax provision (benefit) (in thousands):



	Year Ended December 31,
	2014			2013			2012
Current	$	314		$	(12	)	$	(1,144	)
Deferred	(150,357		)	2,652			17,216
Total	$	(150,043	)	$	2,640		$	16,072

Reconciliations of income taxes computed using the U.S. Federal statutory rate (35%) to the effective income tax rates are as follows (in thousands):



	Year Ended December 31,
	2014			2013			2012
Income taxes computed at U.S. statutory rate	$	(151,714	)	$	69		$	13,221
State tax provisions (benefits), net of federal benefits	(5,935		)	(184		)	(950		)
Non-deductible equity compensation	666			1,127			1,911
Stock-based compensation tax shortfall	2,409			558			—
Valuation allowances	4,635			385			2,370
Expiration of carryover items	288			400			—
Uncertain Tax Positions	—			—			(977		)
Other, net	(392		)	285			497
Provision (benefit) for income taxes	$	(150,043	)	$	2,640		$	16,072

Effective rate	34.6		%	1,333.4		%	42.5		%

The Company’s operations are concentrated in Texas and Louisiana. The Company’s state tax provision varies in proportion to the overall statutory rate due to differences in deductions allowed for U.S. Federal and state income taxes.

In 2014 and 2013, the Company recorded tax expense of $2.4 million and $0.6 million, respectively, for stock-based compensation shortfalls. These shortfalls are for stock compensation grants on which the realized tax deduction was less than expense booked for these grants. Historically, the Company recorded excess tax benefits and shortfalls to paid-in-capital. However, during 2013 the Company exhausted its APIC Pool. The total tax effect of the shortfall for 2013 was $2.2 million, with $1.6 million being recorded as a reduction in paid-in-capital, and the remainder to tax expense. The entire shortfall for 2014 was recorded as tax expense.

The valuation allowances are primarily attributable to Louisiana net operating loss carryovers.

The tax effects of temporary differences representing the net deferred tax asset (liability) at December 31, 2014 and 2013 were as follows (in thousands):



	Year Ended December 31,
	2014			2013
Deferred tax assets:
Federal net operating loss (“NOL”) carryovers	$	141,896		$	117,713
NOLs for excess stock-based compensation	(9,606		)	(9,615		)
State NOL carryovers	15,525			14,626
Alternative minimum tax credits	2,092			2,092
Other Carryover Items	1,294			1,295
Asset Retirement Obligations	26,388			28,628
Unrealized share-based compensation	9,471			9,957
Valuation allowance	(11,327		)	(6,703		)
Other	4,056			6,042
Total deferred tax assets	$	179,789		$	164,035

Deferred tax liabilities:
Oil and gas exploration and development costs	$	(258,326	)	$	(393,606	)
Other	(1,596		)	(919		)
Total deferred tax liabilities	$	(259,922	)	$	(394,525	)

Net deferred tax liabilities	$	(80,133	)	$	(230,490	)

Net current deferred tax assets	6,243			10,715

Net non-current deferred tax liabilities	$	(86,376	)	$	(241,205	)

The federal NOL carryovers totaling $405.4 million will expire between 2027 and 2034 if not utilized in earlier periods. Deferred tax benefits for excess stock-based compensation deductions represent stock-based compensation that have generated tax deductions that have not yet resulted in a cash tax benefit because the Company has NOL carryovers. The Company plans to recognize the federal NOL net deferred tax assets associated with excess stock-based compensation tax deductions only when all other components of the federal NOL carryover tax assets have been fully utilized. If and when the excess stock-based compensation related NOL carryover tax assets are realized, the benefit will be credited directly to equity. The state NOL carryovers are for Louisiana. The Louisiana loss carryovers are scheduled to expire between 2015 and 2029. The valuation allowances include $10.9 million and $6.6 million for 2014 and 2013, respectively for the Louisiana NOL carryovers.

U.S. Federal income tax returns for 2007 forward, Louisiana income tax returns from 1999 forward, New Zealand income tax returns after 2007, and Texas franchise tax returns after 2009 remain open to possible examination by the taxing authorities. There are no material unresolved items related to periods previously audited by these taxing authorities. No other jurisdiction returns are significant to our financial position.

As of December 31, 2014, we do not have any accrued liability for uncertain tax positions. We do not believe the total of unrecognized tax positions will significantly increase or decrease during the next 12 months.