NOTE O. Income Taxes

The Company and its eligible subsidiaries file a consolidated United States federal income tax return. Certain subsidiaries are not eligible to be included in the consolidated United States federal income tax return and separate provisions for income taxes have been determined for these entities or groups of entities. The tax returns and the amount of taxable income or loss are subject to examination by United States federal, state, local and foreign taxing authorities. The Company made current and estimated tax payments of $12.4 million, $32.3 million and $22.3 million (net of tax refunds) during 2013, 2012 and 2011, respectively. These payments and net refunds include tax payments related to Pioneer Tunisia's and Pioneer South Africa's operations of $9.8 million and $12.2 million during 2012 and 2011, respectively.

The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration. Pioneer monitors Company-specific, oil and gas industry and worldwide economic factors and assesses the likelihood that the Company's net operating loss carryforwards ("NOLs") and other deferred tax attributes in the United States, state, local and foreign tax jurisdictions will be utilized prior to their expiration.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. As of December 31, 2013, the Company had unrecognized tax benefits of $21.2 million resulting from net operating loss carryovers and alternative minimum tax credits obtained from the acquisition of Premier Silica. The unrecognized tax benefit is recorded as a reduction of the associated deferred tax asset and, if recognized, would affect the annual effective tax rate. The Company expects to resolve uncertainties regarding the unrecognized tax benefit within twelve months of December 31, 2013. There were no unrecognized tax benefits as of December 31, 2012.

With respect to income taxes, the Company's policy is to account for interest charges as interest expense and any penalties as other expense in the consolidated statements of operations. The Company files income tax returns in the United States federal jurisdiction, and various state and foreign jurisdictions. As of December 31, 2013, there are no proposed adjustments or uncertain positions in any jurisdiction that would have a significant effect on the Company's future results of operations or financial position. The Company's earliest open years in its key jurisdictions are as follows:



United States	2012
Various U.S. states	2009
South Africa	2008

The Company's income tax (provision) benefit and amounts separately allocated were attributable to the following items for the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
	2013		2012			2011
	(in thousands)
Income tax (provision) benefit from continuing operations	$	211,775	$	(290,488	)	$	(188,278	)
Income tax (provision) benefit from discontinued operations	250,882		182,437			(267,314		)
Changes in goodwill - tax benefits related to stock-based compensation	—		—			40
Changes in stockholders' equity:
Net deferred hedge (loss) gain	—		(1,725		)	8,407
Excess tax benefit related to stock-based compensation	17,639		58,486			31,087
Tax benefit attributable to conversion of 2.875% senior convertible notes	38,415		—			—
Tax benefit attributable to 2013 merger with Pioneer Southwest	200,091		—			—
Tax attributable to 2008 Pioneer Southwest initial public offering	—		(49,072		)	—
Tax attributable to 2009 and 2011 issuance of Pioneer Southwest common units	—		—			(23,711		)
Tax on Pioneer Southwest common units sold by the Company during 2011	—		—			(15,381		)

The Company's income tax (provision) benefit attributable to income from continuing operations consisted of the following for the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
	2013			2012			2011
	(in thousands)
Current:
U.S. federal	$	(10,406	)	$	(5,575	)	$	—
U.S. state	44			1,316			(6,948		)
Foreign	(237		)	—			—
	(10,599		)	(4,259		)	(6,948		)
Deferred:
U.S. federal	201,060			(272,289		)	(179,699		)
U.S. state	21,314			(13,940		)	(1,631		)
	222,374			(286,229		)	(181,330		)
Income tax (provision) benefit from continuing operations	$	211,775		$	(290,488	)	$	(188,278	)

Reconciliations of the United States federal statutory tax rate to the Company's effective tax rate for income (loss) from continuing operations are as follows for the years ended December 31, 2013, 2012 and 2011:



	Year Ended December 31,
	2013			2012			2011
	(in thousands, except percentages)
Income (loss) from continuing operations before income taxes	$	(561,719	)	$	837,520		$	596,068
Less: Net income attributable to noncontrolling interests	(38,865		)	(50,537		)	(47,425		)
Income (loss) from continuing operations attributable to common stockholders before income taxes	(600,584		)	786,983			548,643
Federal statutory income tax rate	35		%	35		%	35		%
(Provision) benefit for federal income taxes	210,204			(275,444		)	(192,025		)
State income tax (provision) benefit (net of federal tax)	13,883			(8,206		)	(5,576		)
Other	(12,312		)	(6,838		)	9,323
Income tax (provision) benefit from continuing operations	$	211,775		$	(290,488	)	$	(188,278	)
Effective income tax rate, excluding income attributable to the noncontrolling interest	35		%	37		%	34		%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities related to continuing operations are as follows as of December 31, 2013 and 2012:



	December 31,
	2013			2012
	(in thousands)
Deferred tax assets:
Net operating loss carryforward (a) (b)	$	328,874		$	509,485
Asset retirement obligations	73,623			72,391
Incentive plans	67,990			51,056
Other	74,184			107,836
Total deferred tax assets	544,671			740,768
Deferred tax liabilities:
Oil and gas properties, principally due to differences in basis, depletion and the deduction of intangible drilling costs for tax purposes	(1,569,886		)	(2,322,571		)
Other property and equipment, principally due to the deduction of bonus depreciation for tax purposes	(254,632		)	(263,939		)
Net deferred hedge gains	(108,784		)	(173,097		)
Other	(103,255		)	(208,058		)
Total deferred tax liabilities	(2,036,557		)	(2,967,665		)
Net deferred tax liability	$	(1,491,886	)	$	(2,226,897	)
Reflected in accompanying consolidated balance sheets as:
Current deferred income tax liability	$	(19,169	)	$	(86,481	)
Noncurrent deferred income tax liability	(1,472,717		)	(2,140,416		)
Total	$	(1,491,886	)	$	(2,226,897	)

____________________


(a)	Net operating loss carryforwards as of December 31, 2013 consist of $917.4 million of U.S. federal NOLs which expire primarily in 2032, $122.0 million of Colorado NOLs which expire between 2027 and 2033 and $50.6 million of Kansas NOLs which expire between 2018 and 2023.


(b)	Net operating loss carryforwards as of December 31, 2013 are net of a $1.5 million valuation allowance relating to $32 million of Kansas NOLs that the Company believes will more likely than not expire unutilized.