(H) Income Taxes

The provision for income taxes includes the following components:

	For the Years Ended March 31,
	2015			2014			2013
	(dollars in thousands)
Current Provision (Benefit) -
Federal	$	62,424		$	49,604		$	19,108
State		(2,155	)		2,211			1,089
		60,269			51,815			20,197
Deferred Provision (Benefit) -
Federal		(962	)		7,691			5,173
State		6,767			(1,945	)		982
		5,805			5,746			6,155
Provision for Income Taxes	$	66,074		$	57,561		$	26,352

The effective tax rates vary from the federal statutory rates due to the following items:

	For the Years Ended March 31,
	2015			2014			2013
	(dollars in thousands)
Earnings Before Income Taxes	$	252,927		$	181,804		$	84,096
Income Taxes at Statutory Rate	$	88,524		$	63,631		$	29,434
Increases (Decreases) in Tax Resulting from -
State Income Taxes, net		4,582			173			1,346
Statutory Depletion in Excess of Cost		(4,367	)		(3,512	)		(3,110	)
Domestic Production Activities Deduction		(6,853	)		(3,453	)		(1,895	)
Meals and Entertainment Disallowance		647			503			337
Penalties on Uncertain Tax Positions		—			213			215
IRS Settlement		(16,559	)		—			—
Other		100			6			25
Provision for Income Taxes	$	66,074		$	57,561		$	26,352
Effective Tax Rate		26%			32	%		31	%

The deferred income tax provision results from the following temporary differences in the recognition of revenues and expenses for tax and financial reporting purposes:

	For the Years Ended March 31,
	2015			2014			2013
	(dollars in thousands)
Excess Tax Depreciation and Amortization	$	2,259		$	6,875		$	7,038
Bad Debts		(142	)		(224	)		(73	)
Uniform Capitalization		1,296			(1,127	)		(14	)
Accrual Changes		(611	)		(1,075	)		(1,169	)
Uncertain Tax Position Accruals		—			213			173
Prepaid Insurance		(331	)		424			—
State Income Taxes, net		6,060			(1,319	)		1,130
Long-term Incentive Compensation Plans		(1,792	)		(373	)		1,293
Other		(934	)		1,033			(1,093	)
	$	5,805		$	5,746		$	6,155

Components of deferred income taxes are as follows:

	March 31,
	2015			2014
	(dollars in thousands)
Items Giving Rise to Deferred Tax Liabilities -
Excess Tax Depreciation and Amortization	$	(153,045	)	$	(144,519	)
Depletion		(18,374	)		(100	)
Repair Parts		(3,376	)		(4,545	)
State Income Taxes, net		(13,708	)		(7,648	)
Other		(5,359	)		(9,125	)
Total Deferred Tax Liabilities	$	(193,862	)	$	(165,937	)
Items Giving Rise to Deferred Tax Assets -
Accrual Changes	$	10,557		$	9,946
Bad Debts		2,264			2,122
Uniform Capitalization		835			2,131
Deferred Revenue		4,382			—
Long-term Incentive Compensation Plan		8,318			6,526
Other		7,118			—
Total Deferred Tax Assets	$	33,474		$	20,725

Deferred income taxes are classified in the consolidated balance sheet as follows:

	March 31,
	2015			2014
	(dollars in thousands)
Prepaid and Other Assets	$	2,265		$	561
Deferred Income Taxes	$	(162,653	)	$	(145,773	)

Uncertain tax position –

We are subject to audit examinations at federal, state and local levels by tax authorities in those jurisdictions who may challenge the treatment or reporting of any return item. The tax matters challenged by the tax authorities are typically complex; therefore, the ultimate outcome of these challenges is subject to uncertainty.

Reconciliation of the consolidated liability for gross unrecognized tax benefits, excluding interest, from April 1, 2012 to March 31, 2015, is as follows:

	For the Years Ended March 31,
	2015			2014		2013
	(dollars in thousands)
Balance at Beginning of Year	$	24,802		$	24,589	$	25,890
Increase related to prior tax positions		—			213		215
Decrease related to prior tax positions		(24,802	)		—		(1,516	)
Payments		—			—		—
	$	—		$	24,802	$	24,589

We recognize penalties associated with uncertain tax positions as part of the tax provision, while interest associated with uncertain tax positions is included in interest expense. The following is a summary of the amounts of interest and penalties recognized in relation to our uncertain tax position:

	For the Years Ended March 31,
	2015			2014		2013
	(dollars in thousands)
Accrued interest recognized	$	(3,847	)	$	641	$	409
Accrued penalties recognized	$	(6,475	)	$	213	$	173

There was no accrued interest or penalties related to our uncertain tax position during the fiscal year ended March 31, 2015. Accrued interest and penalties related to our uncertain tax positions totaled $4.4 million and $3.2 million, respectively, at March 31, 2014.

In May 2011, we filed a lawsuit against the Internal Revenue Service (“IRS”) in Federal District Court to recover all of the amounts paid to the IRS with respect to our uncertain tax position for 2001 to 2006. In September 2014 we reached a tentative agreement with the IRS to settle this case, and that agreement was approved by the U.S. Department of Justice in January 2015. Under the terms of the settlement agreement, we dismissed our lawsuit seeking to recover taxes, interest and penalties paid, in exchange for the IRS conceding 40% of the penalties, plus related interest, to date. The impact from the settlement agreement was approximately $17 million, including state benefits, which was recorded as a reduction of income tax expense during the fourth quarter of fiscal 2015. The related interest refund of approximately $4.4 million was also recorded during the fourth quarter of fiscal 2015.