Note 10. Income Taxes

The provision for income taxes consists of the following for the years ended December 31:



(in thousands)
	2016			2015			2014
Current income tax expense	$	109,727		$	106,155		$	87,064
Deferred income tax benefit	(2		)	(14,584		)	(3,305		)
Income tax expense	$	109,725		$	91,571		$	83,759

A reconciliation of the provision for income taxes, with amounts determined by applying the statutory federal income tax rate to pre-tax income, is as follows for the years ended December 31:



(in thousands)
	2016			2015			2014
Income tax at statutory rate	$	112,032		$	93,187		$	87,943
Tax-exempt interest	(2,270		)	(2,285		)	(2,589		)
Other, net	(37		)	669			(1,595		)
Income tax expense	$	109,725		$	91,571		$	83,759

Temporary differences and carry-forwards, which give rise to deferred tax assets and liabilities, are as follows for the years ended December 31:



(in thousands)
	2016		2015
Deferred tax assets:
Other employee benefits	$	19,106	$	19,945
Pension and other postretirement benefits	65,241		48,897
Allowance for management fee returned on cancelled policies	4,795		4,375
Other	81		546
Total deferred tax assets	89,223		73,763
Deferred tax liabilities:
Depreciation	18,493		17,843
Prepaid expenses	8,120		6,929
Limited partnerships	5,597		5,822
Unrealized gains on investments	1,657		1,360
Other	1,467		1,123
Total deferred tax liabilities	35,334		33,077
Net deferred tax asset	$	53,889	$	40,686

We had no valuation allowance recorded at December 31, 2016 or December 31, 2015. The IRS has examined our tax filings through tax year ended 2012.

We are the attorney-in-fact for the subscribers (policyholders) at the Exchange, a reciprocal insurance exchange. In that capacity, we provide all services and facilities necessary to conduct the Exchange’s insurance business. Indemnity and the Exchange together constitute a single insurance business. Consequently, we are not subject to state corporate income or franchise taxes in states where the Exchange conducts its business and the states collect premium tax in lieu of corporate income or franchise tax, as a result of the Exchange’s remittance of premium taxes in those states.