Taxes

The Company is subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. The tax years 2002 through 2014 remain open to examination for U.S. federal income tax matters and 1998 through 2014 remain open to examination for various state income tax matters.

Significant components of the provision for (benefit from) income taxes are as follows:



	Year Ended December 31
	2014		2013			2012
	(In thousands)
Current:
Federal	$	—	$	—		$	(20,022	)
State	25		(647		)	575
Total current	25		(647		)	(19,447		)
Deferred:
Federal	18,535		(318,956		)	(341,486		)
State	7,074		(15,895		)	7,026
Total deferred	25,609		(334,851		)	(334,460		)
	$	25,634	$	(335,498	)	$	(353,907	)

A reconciliation of the statutory federal income tax provision (benefit) at the statutory rate to the actual provision for (benefit from) income taxes follows:



	Year Ended December 31
	2014			2013			2012
	(In thousands)
Income tax provision (benefit) at statutory rate	$	(186,452	)	$	(378,463	)	$	(382,581	)
Percentage depletion allowance	(12,692		)	(15,796		)	(33,654		)
Goodwill	—			70,301			56,916
State taxes, net of effect of federal taxes	(3,903		)	(25,265		)	(24,231		)
Change in valuation allowance	226,929			8,659			31,832
Other, net	1,752			5,066			(2,189		)
	$	25,634		$	(335,498	)	$	(353,907	)

In 2014, 2013 and 2012, compensatory stock options and other equity based compensation awards were exercised resulting in a tax expense (benefit) of $1.6 million, $1.5 million and $0.3 million, respectively. The tax benefit will be recorded in paid-in capital at such point in time when a cash tax benefit is recognized.

Significant components of the Company's deferred tax assets and liabilities that result from carryforwards and temporary differences between the financial statement basis and tax basis of assets and liabilities are summarized as follows:



	December 31,
	2014			2013
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	871,848		$	660,916
Alternative minimum tax credit carryforwards	127,169			126,755
Reclamation and mine closure	114,430			113,843
Goodwill	50,072			52,636
Workers' compensation	38,924			31,641
Share based compensation	30,283			28,494
Acquired sales contracts	26,833			33,392
Retiree benefit plans	22,913			20,527
Contract obligations	15,693			19,327
Other, primarily accrued liabilities	64,503			68,969
Gross deferred tax assets	1,362,668			1,156,500
Valuation allowance	(270,251		)	(43,322		)
Total deferred tax assets	1,092,417			1,113,178
Deferred tax liabilities:
Plant and equipment	1,354,396			1,364,382
Deferred development	95,129			91,126
Investment in tax partnerships	7,377			8,170
Other	5,533			13,902
Total deferred tax liabilities	1,462,435			1,477,580
Net deferred liability	370,018			364,402

The Company has federal net operating loss carryforwards for regular income tax purposes of $2.4 billion at December 31, 2014 that will expire between 2022 and 2034. The Company has an alternative minimum tax credit carryforward of $127.2 million at December 31, 2014, which has no expiration date and can be used to offset future regular tax in excess of the alternative minimum tax.

The Company recorded increases in its valuation allowance against its deferred tax assets of $226.9 million, $8.7 million and $31.8 million in 2014, 2013 and 2012, respectively. In 2014, the Company determined that it would not realize the all of the benefit from federal and state net operating losses, based on projections of reversing timing differences in the future. Adjustments in 2013 and 2012 relate to certain state and foreign net operating loss benefits.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:



		(In thousands)
Balance at	January 1, 2012	$	8,798
Additions based on tax positions related to the current year		409
Additions for tax positions of prior years		21,943
Balance at	December 31, 2012	31,150
Additions based on tax positions related to the current year		1,199
Additions for tax positions of prior years		688
Reductions as a result of lapses in the statute of limitations		(1,248		)
Balance at	December 31, 2013	31,789
Additions for tax positions of the current year		2,920
Balance at	December 31, 2014	$	34,709

If recognized, the entire amount of the gross unrecognized tax benefits at December 31, 2014 would affect the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The Company had accrued interest and penalties of $1.5 million and $1.3 million at December 31, 2014 and 2013, respectively. In the next 12 months, no gross unrecognized tax benefits are expected to be reduced due to the expiration of the statute of limitations.