Income Taxes

Income tax expense is summarized as follows:



	Year Ended December 31,
(In thousands)	2014			2013		2012
Current
Federal	$	44,887		$	56,544	$	24,618
State	(4,387		)	10,841		563
	40,500			67,385		25,181
Deferred
Federal	(32,375		)	111,147		57,704
State	(80,192		)	27,233		23,225
	(112,567		)	138,380		80,929
Income tax (benefit) expense	$	(72,067	)	$	205,765	$	106,110

Income tax expense was different than the amounts computed by applying the statutory federal income tax rate as follows:



	Year Ended December 31,
(In thousands)	2014			2013			2012
Statutory federal income tax rate	35		%	35		%	35		%
Computed "expected" federal income tax	$	11,341		$	169,938		$	83,244
Deferred tax adjustment related to change in overall state tax rate	(86,956		)	15,220			13,596
State income tax, net of federal income tax benefit	903			17,513			9,609
Valuation allowance	3,977			—			262
Uncertain tax positions	(1,974		)	2,400			—
Other, net	642			694			(601		)
Income tax expense	$	(72,067	)	$	205,765		$	106,110

The composition of deferred tax liabilities and deferred tax assets were as follows:



	December 31,
(In thousands)	2014		2013
Deferred Tax Assets
Net operating loss carryforward	$	141,961	$	78,182
Alternative minimum tax carryforward	227,719		182,212
Foreign tax credit	4,525		4,822
Derivative instruments	—		3,946
Incentive compensation	21,961		36,450
Deferred compensation	9,531		11,988
Post-retirement benefits	13,689		13,965
Other	747		3,619
Total	420,133		335,184
Deferred Tax Liabilities
Properties and equipment	1,248,532		1,321,241
Derivative instruments	50,750		—
Total	1,299,282		1,321,241
Net deferred tax liabilities	$	879,149	$	986,057

As of December 31, 2014, the Company had alternative minimum tax credit carryforwards of $227.7 million, which do not expire and can be used to offset regular income taxes in future years to the extent that regular income taxes exceed the alternative minimum tax in any such year. The Company also had net operating loss carryforwards of $399.8 million and $483.7 million for federal and state reporting purposes, respectively, the majority of which will expire between 2020 and 2034. The Company believes it is more likely than not that these deferred tax benefits will be utilized prior to their expiration. Tax benefits related to employee stock-based compensation included in net operating loss carryforwards but not reflected in deferred tax assets as of December 31, 2014 are approximately $108.6 million.

For state income tax purposes, the Company must estimate the respective amounts of future earnings that are subject to income tax in the various states in which the Company operates. These estimates may change based on a variety of factors, including but not limited to the composition and location of the Company’s asset base and the location of the Company’s customers. In 2014, the Company’s effective tax rate decreased compared to 2013 due to a change in estimated deferred state tax liabilities reflected in the Company’s Consolidated Balance Sheet, which was based on updated state apportionment factors in states in which it operates.

Unrecognized Tax Benefits

A reconciliation of unrecognized tax benefits is as follows:



	Year Ended December 31,
(In thousands)	2014			2013		2012
Balance at beginning of year	$	3,700		$	—	$	—
Additions based on tax provisions related to the current year	—			3,700		—
Additions for tax positions of prior years	—			—		—
Reductions for tax positions of prior years	(3,037		)	—		—
Settlements	—			—		—
Balance at end of year	$	663		$	3,700	$	—

During 2013, the Company recorded unrecognized tax benefits of $3.7 million based on the allocation of certain gains associated with its divestitures for purposes of computing state income taxes. These benefits were reduced during 2014 by $3.0 million based on changes to the Company's state tax rates. If recognized, the net tax benefit of $0.7 million would not have a material effect on the Company's effective tax rate.

The Company files income tax returns in the U.S. federal, various states and other jurisdictions. The Company is no longer subject to examinations by state authorities before 2010 or by federal authorities before 2011. The Company is not currently under examination by the Internal Revenue Service.