(5) Taxes on Income

Earnings before taxes on income and details of the provision for taxes on income for the years ended December 31, 2015, 2014 and 2013 were as follows (in thousands):

	2015		2014		2013
Earnings before taxes on income — United States	$	361,712	$	454,390	$	408,678

Provision for taxes on income:
Federal:
Current	$	64,707	$	81,953	$	41,008
Deferred		59,582		72,920		97,586
State and local		9,453		14,909		13,785
	$	133,742	$	169,782	$	152,379

During the three years ended December 31, 2015, 2014 and 2013, tax benefits related to the exercise of stock options and the issuance of restricted stock that were allocated directly to additional paid-in capital were $964,000, $6,119,000 and $3,001,000, respectively.

The Company’s provision for taxes on income varied from the statutory federal income tax rate for the years ended December 31, 2015, 2014 and 2013 due to the following:

	2015			2014			2013
United States income tax statutory rate		35.0	%		35.0	%		35.0	%
State and local taxes, net of federal benefit		1.7			2.2			2.2
Other – net		.3			.2			.1
		37.0	%		37.4	%		37.3	%

The tax effects of temporary differences that give rise to significant portions of the current deferred tax assets and non-current deferred tax assets and liabilities at December 31, 2015 and 2014 were as follows (in thousands):

	2015			2014
Current deferred tax assets:
Compensated absences	$	829		$	854
Allowance for doubtful accounts		3,288			3,111
Insurance accruals		4,234			2,858
Other		3,372			3,739
	$	11,723		$	10,562

Non-current deferred tax assets and liabilities:
Deferred tax assets:
Postretirement health care benefits	$	2,501		$	2,795
Insurance accruals		3,410			3,325
Deferred compensation		10,534			10,157
Unrealized loss on defined benefit plans		25,245			34,501
Operating loss carryforwards		5,188			5,219
Other		20,702			20,687
Valuation allowances		(4,716	)		(4,704	)
		62,864			71,980

Deferred tax liabilities:
Property		(604,737	)		(547,388	)
Deferred state taxes		(53,542	)		(49,503	)
Pension benefits		(8,471	)		(11,198	)
Goodwill and other intangibles		(44,185	)		(37,936	)
Other		(21,737	)		(21,724	)
		(732,672	)		(667,749	)
	$	(669,808	)	$	(595,769	)

The Company has determined that it is more likely than not that all federal deferred tax assets at December 31, 2015 will be realized, including its operating loss carryforwards of $472,000 that expire in various amounts through 2030.

The valuation allowance for state deferred tax assets as of December 31, 2015 and 2014 was $4,716,000 and $4,704,000 respectively, related to the Company’s state net operating loss carryforwards based on the Company’s determination that it is not more likely than not that the deferred tax assets will be realized. Expiration of these state net operating loss carryforwards vary by state through 2035 and none will expire in fiscal 2016.

The Company or one of its subsidiaries files income tax returns in the United States federal jurisdiction and various state jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the 2012 through 2014 tax years. With few exceptions, the Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the 2009 through 2014 tax years.

As of December 31, 2015, the Company has provided a liability of $2,479,000 for unrecognized tax benefits related to various income tax issues which includes interest and penalties. The amount that would impact the Company’s effective tax rate, if recognized, is $1,678,000, with the difference between the total amount of unrecognized tax benefits and the amount that would impact the effective tax rate being primarily related to the federal tax benefit of state income tax items. It is not reasonably possible to determine if the liability for unrecognized tax benefits will significantly change prior to December 31, 2016 due to the uncertainty of possible examination results.

A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013, is as follows (in thousands):

	2015			2014			2013
Balance at beginning of year	$	1,171		$	949		$	1,045
Additions based on tax positions related to the current year		339			470			239
Additions for tax positions of prior years		785			39			114
Reductions for tax positions of prior years		(337	)		(287	)		(413	)
Settlements		—			—			(36	)
Balance at end of year	$	1,958		$	1,171		$	949

The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company recognized net expense (credit) of $216,000, $40,000 and $(421,000) in interest and penalties for the years ended December 31, 2015, 2014 and 2013, respectively. The Company had $522,000, $306,000 and $266,000 of accrued liabilities for the payment of interest and penalties at December 31, 2015, 2014 and 2013, respectively.