9. Income Taxes

The income tax provision consisted of the following for the years ended December 31:

(in thousands)	2013		2012		2011

Current
Federal	$	16,812	$	14,856	$	10,047
State		2,920		2,885		2,038


		19,732		17,741		12,085


Deferred
Federal		218		2,396		(1,039	)
State		163		291		(287	)


		381		2,687		(1,326	)


Income tax expense	$	20,113	$	20,428	$	10,759

The differences between the U.S. federal statutory tax rate and the Company's effective tax rate for continuing operations were as follows for the years ended December 31:



U.S federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of U.S. federal income tax expense	3.5		3.8		4.5
Provision to return adjustments, net	(0.3	)	(0.2	)	(0.3	)
Deferred tax adjustments, net	—		—		(0.1	)
Domestic production/manufacturing deduction	(2.0	)	(2.0	)	(2.7	)
Non-deductible meals and entertainment	0.4		0.4		0.7
Research and development credit	—		(0.1	)	(0.1	)
Other, net	0.1		0.5		—


	36.7	%	37.4	%	37.0	%

The net deferred tax assets and (liabilities) arising from temporary differences was as follows at December 31:

(in thousands)	2013			2012

Deferred income tax assets:
Self insurance reserves	$	8,643		$	9,439
Contract loss reserves		435			49
Stock-based awards		4,245			5,099
Bonus		2,884			1,931
Other		2,588			1,322


Total deferred income tax assets		18,795			17,840


Deferred income tax liabilities:
Property and equipment—tax over book depreciation		(24,037	)		(22,572	)
Intangible assets—tax over book amortization		(3,927	)		(4,056	)


Total deferred income tax liabilities		(27,964	)		(26,628	)


Net deferred income taxes	$	(9,169	)	$	(8,788	)

The balance sheet classification of deferred income taxes is as follows:

(in thousands)	2013			2012

Current deferred income tax assets	$	14,550		$	12,742
Non-current deferred income tax liabilities		(23,719	)		(21,530	)


	$	(9,169	)	$	(8,788	)

The Company is subject to taxation in various jurisdictions. The Company's federal tax returns for 2009 and 2010 are currently under examination by the Internal Revenue Service. The Company remains subject to examination by U.S. federal authorities for the remaining open tax years (2011 and 2012) and by various state authorities for the years 2009 through 2012.

The Company has recorded a liability for unrecognized tax benefits related to tax positions taken on its various income tax returns. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The Company anticipates that total unrecognized tax benefits will be reduced within the next 12 months due to the lapses in the applicable statutes of limitations, as well as pending federal tax settlements for the two years under examination. The adjustment related to these items is estimated at approximately $0.3 million.

The following is a reconciliation of the beginning and ending liabilities for unrecognized tax benefits at December 31:

(in thousands)	2013			2012

Balance at beginning of period	$	655		$	567
Gross increases in current period tax positions		132			186
Gross increases in prior period tax positions		55			134
Gross decreases in prior period tax positions		(185	)		(232	)


Balance at end of period		657			655
Accrued interest and penalties at end of period		189			185


Total liability for unrecognized tax benefits	$	846		$	840

The liability for unrecognized tax benefits, including accrued interest and penalties, were included in other liabilities in the accompanying consolidated balance sheets. The amount of interest and penalties charged or credited to income tax expense as a result of the unrecognized tax benefits was $0.0, $0.2 and $0.1 million for the year ended December 31, 2013, 2012 and 2011, respectively.