Income Taxes

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



	2015			2014			2013
				(In thousands)
United States	$	181,623		$	242,442		$	242,569
Foreign	(1,326		)	(52		)	416
Income before income taxes from continuing operations	$	180,297		$	242,390		$	242,985

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



	2015			2014			2013
				(In thousands)
Current:
Federal	$	59,483		$	4,403		$	41,624
State	5,789			(166		)	4,148
Foreign	30			—			(29		)
	65,302			4,237			45,743
Deferred:
Income taxes:
Federal	3,199			55,514			29,616
State	(2,478		)	2,467			(859		)
Investment tax credit - net	(420		)	1,009			(206		)
	301			58,990			28,551
Total income tax expense	$	65,603		$	63,227		$	74,294

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



	2015			2014
	(In thousands)
Deferred tax assets:
Postretirement	$	97,666		$	99,853
Compensation-related	33,844			35,669
Alternative minimum tax credit carryforward	28,173			23,678
Customer advances	12,623			12,245
Asset retirement obligations	8,694			7,894
Legal and environmental contingencies	6,377			7,890
Other	58,202			52,862
Total deferred tax assets	245,579			240,091
Deferred tax liabilities:
Depreciation and basis differences on property, plant and equipment	791,368			773,160
Postretirement	71,835			70,642
Intangible asset amortization	23,950			22,810
Other	36,906			46,637
Total deferred tax liabilities	924,059			913,249
Valuation allowance	8,990			8,852
Net deferred income tax liability	$	(687,470	)	$	(682,010	)

As of December 31, 2015 and 2014, the Company had various state income tax net operating loss carryforwards of $116.2 million and $114.3 million, respectively, and federal and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $10.9 million and $7.5 million, respectively. The federal income tax credit carryforwards expire in 2036 if not utilized and state income tax credit carryforwards are due to expire between 2016 and 2032. 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, 2014, to December 31, 2015, to deferred income tax expense:



	2015
(In thousands)
Change in net deferred income tax liability from the preceding table	$	5,460
Deferred taxes associated with other comprehensive income	(3,086		)
Other	(2,073		)
Deferred income tax expense for the period	$	301

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,	2015					2014					2013
	Amount			%		Amount			%		Amount			%
	(Dollars in thousands)
Computed tax at federal statutory rate	$	63,104		35.0		$	84,836		35.0		$	85,045		35.0
Increases (reductions) resulting from:
State income taxes, net of federal income tax	4,903			2.7		7,048			2.9		7,379			3.0
Noncontrolling interest	12,340			6.8		1,363			.5		—			—
Federal renewable energy credit	(3,400		)	(1.9	)	(3,655		)	(1.5	)	(3,404		)	(1.4	)
Tax compliance and uncertain tax positions	(194		)	(.1	)	(8,987		)	(3.7	)	(3,902		)	(1.6	)
Domestic production activities	—			—		(3,993		)	(1.6	)	(666		)	(.3	)
Other	(11,150		)	(6.1	)	(13,385		)	(5.5	)	(10,158		)	(4.1	)
Total income tax expense	$	65,603		36.4		$	63,227		26.1		$	74,294		30.6

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, 2015. The amount of deferred tax liability, net of allowable foreign tax credits, associated with the undistributed earnings at December 31, 2015, was approximately $900,000.

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 2011. With few exceptions, as of December 31, 2015, the Company is no longer subject to state and local income tax examinations by tax authorities for years ending prior to 2010.

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



	2015			2014			2013
				(In thousands)
Balance at beginning of year	$	105		$	7,845		$	7,845
Settlements	—			(7,740		)	—
Lapse of statute of limitations	(105		)	—			—
Balance at end of year	$	—		$	105		$	7,845

At December 31, 2015 and 2014, there were no tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $119,000, including approximately $14,000 for the payment of interest and penalties at December 31, 2014. Included in income tax expense is interest on uncertain tax positions. For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $122,000, $387,000 and $107,000, respectively, of interest expense in income tax expense.

For the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $3.4 million, $1.2 million and $914,000, respectively, in interest expense. Penalties were not material in 2015, 2014 and 2013. The Company recognized interest income of approximately $3.7 million, $469,000 and $655,000 for the years ended December 31, 2015, 2014 and 2013, respectively. At December 31, 2015 and 2014, the Company had accrued liabilities of approximately $94,000 and interest receivable of $367,000, respectively, for the payment or receipt of interest.