Income Taxes

The components of income before income taxes from continuing operations for each of the years ended December 31 were as follows:



	2016			2015			2014
				(In thousands)
United States	$	326,252		$	248,379		$	249,501
Foreign	(24		)	(1,326		)	(52		)
Income before income taxes from continuing operations	$	326,228		$	247,053		$	249,449

Income tax expense from continuing operations for the years ended December 31 was as follows:



	2016			2015			2014
				(In thousands)
Current:
Federal	$	81,989		$	85,897		$	8,837
State	13,190			10,093			622
Foreign	2			30			—
	95,181			96,020			9,459
Deferred:
Income taxes:
Federal	(2,102		)	(19,632		)	52,041
State	1,184			(5,304		)	1,913
Investment tax credit - net	(1,131		)	(420		)	1,009
	(2,049		)	(25,356		)	54,963
Total income tax expense	$	93,132		$	70,664		$	64,422

Components of deferred tax assets and deferred tax liabilities at December 31 were as follows:



	2016		2015
	(In thousands)
Deferred tax assets:
Postretirement	$	87,872	$	97,666
Compensation-related	44,995		33,714
Alternative minimum tax credit carryforward	29,338		28,169
Federal renewable energy credit	16,944		3,400
Customer advances	13,524		12,623
Legal and environmental contingencies	9,895		6,377
Asset retirement obligations	8,867		8,694
Other	46,957		43,306
Total deferred tax assets	258,392		233,949
Deferred tax liabilities:
Depreciation and basis differences on property, plant and equipment	774,838		756,444
Postretirement	70,670		71,835
Intangible asset amortization	26,413		23,950
Other	45,580		36,359
Total deferred tax liabilities	917,501		888,588
Valuation allowance	9,117		8,990
Net deferred income tax liability	$	668,226	$	663,629

As of December 31, 2016 and 2015, the Company had various state income tax net operating loss carryforwards of $114.7 million and $116.2 million, respectively, and federal and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $43.3 million and $21.3 million, respectively. Included in the state credits are various regulatory investment tax credits of approximately $20.7 million and $13.9 million at December 31, 2016 and 2015, respectively. The federal income tax credit carryforwards expire in 2036 and 2037 if not utilized and state income tax credit carryforwards are due to expire between 2019 and 2042. It is likely that a portion of the benefit from the state carryforwards will not be realized; therefore, valuation allowances have been provided. Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future. The alternative minimum tax credit carryforwards do not expire. For information regarding net operating loss carryforwards and valuation allowances related to discontinued operations, see Note 2.

The following table reconciles the change in the net deferred income tax liability from December 31, 2015, to December 31, 2016, to deferred income tax expense:



	2016
(In thousands)
Change in net deferred income tax liability from the preceding table	$	4,597
Deferred taxes associated with other comprehensive income	(825		)
Other	(5,821		)
Deferred income tax benefit for the period	$	(2,049	)

Total income tax expense differs from the amount computed by applying the statutory federal income tax rate to income before taxes. The reasons for this difference were as follows:



Years ended December 31,	2016					2015					2014
	Amount			%		Amount			%		Amount			%
	(Dollars in thousands)
Computed tax at federal statutory rate	$	114,179		35.0		$	86,468		35.0		$	87,308		35.0
Increases (reductions) resulting from:
State income taxes, net of federal income tax	9,027			2.8		8,208			3.3		7,019			2.8
Federal renewable energy credit	(13,544		)	(4.2	)	(3,400		)	(1.4	)	(3,655		)	(1.5	)
Tax compliance and uncertain tax positions	(3,028		)	(.9	)	(2,607		)	(1.0	)	(8,568		)	(3.4	)
Domestic production activities	(6,251		)	(1.9	)	(6,842		)	(2.8	)	(3,993		)	(1.6	)
Other	(7,251		)	(2.3	)	(11,163		)	(4.5	)	(13,689		)	(5.5	)
Total income tax expense	$	93,132		28.5		$	70,664		28.6		$	64,422		25.8

Deferred income taxes have been accrued with respect to temporary differences related to the Company's foreign operations. The amount of cumulative undistributed earnings for which there are temporary differences is approximately $2.4 million at December 31, 2016. The amount of deferred tax liability, net of allowable foreign tax credits, associated with the undistributed earnings at December 31, 2016, was approximately $889,000.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. The Company is no longer subject to U.S. federal or non-U.S. income tax examinations by tax authorities for years ending prior to 2012. With few exceptions, as of December 31, 2016, the Company is no longer subject to state and local income tax examinations by tax authorities for years ending prior to 2011.

A reconciliation of the unrecognized tax benefits (excluding interest) for the years ended December 31 was as follows:



	2016		2015			2014
			(In thousands)
Balance at beginning of year	$	—	$	105		$	7,845
Settlements	—		—			(7,740		)
Lapse of statute of limitations	—		(105		)	—
Balance at end of year	$	—	$	—		$	105

Included in income tax expense is interest on uncertain tax positions. For the years ended December 31, 2016, 2015 and 2014, the Company recognized approximately $(92,000), $122,000 and $387,000, respectively, of interest (income) expense in income tax expense. At December 31, 2016 and 2015, the Company had accrued receivables of approximately $54,000 and interest payable of $94,000, respectively, for the receipt or payment of interest.