6. INCOME TAXES

Income tax provision (benefit) consisted of:


	Years Ended
	December 28,		December 29,		December 30,
(in thousands)	2014		2013		2012
Current:
Federal	$	233,247	$	16,100	$	2,523
State		30,216		5,108		(16,636)
Deferred:
Federal		(29,182)		(7,262)		(4,595)
State		(3,051)		(2,287)		(5,017)
Income tax provision (benefit)	$	231,230	$	11,659	$	(23,725)

The effective tax rate expense (benefit) and the statutory federal income tax rate are reconciled as follows:


	Years Ended
	December 28,		December 29,		December 30,
(in thousands)	2014		2013		2012
Statutory rate	35.0	%	35.0	%	(35.0)	%
State taxes, net of federal benefit	3.0		12.3		5.4
Changes in estimates	—		—		0.2
Changes in unrecognized tax benefits	—		(6.0)		(43.8)
Settlements	(0.1)		(1.5)		(25.4)
Other	0.1		3.1		3.0
Stock compensation	0.1		(1.4)		9.9
Effective tax rate	38.1	%	41.5	%	(85.7)	%

The components of deferred tax assets and liabilities consisted of the following:


	December 28,		December 29,
(in thousands)	2014		2013
Deferred tax assets:
Compensation benefits	$	248,585	$	187,516
State taxes		6,061		3,625
State loss carryovers		2,266		5,007
Other		4,508		4,727
Total deferred tax assets		261,420		200,875
Valuation allowance		(2,265)		(3,741)
Net deferred tax assets		259,155		197,134
Deferred tax liabilities:
Depreciation and amortization		195,616		213,159
Investments in unconsolidated subsidiaries		52,711		71,840
Debt discount		9,618		12,434
Deferred gain on debt		26,318		33,007
Total deferred tax liabilities		284,263		330,440
Net deferred tax liabilities	$	25,108	$	133,306

The valuation allowance relates to state net operating loss and capital loss carryovers, and decreased by $1.5 million in fiscal year 2014 and $0.4 million in fiscal year 2013.

As of December 28, 2014, we have net operating losses in various states totaling approximately $164.3 million. The net operating losses expire in various years between fiscal years 2020 and 2033 if not used.

As of December 28, 2014, we had approximately $15.8 million of long‑term liabilities relating to uncertain tax positions consisting of approximately $13.0 million in gross unrecognized tax benefits (primarily state tax positions before the offsetting effect of federal income tax) and $2.7 million in gross accrued interest and penalties. If recognized, approximately $6.4 million of the net unrecognized tax benefits would impact the effective tax rate, with the remainder impacting other accounts, primarily deferred taxes. It is reasonably possible that a reduction of up to $3.9 million of unrecognized tax benefits and related interest may occur within the next 12 months as a result of the expiration of statutes of limitations.

We record interest on unrecognized tax benefits as a component of interest expense, while penalties are recorded as part of income tax expense. Related to the unrecognized tax benefits noted below, we recorded interest expense (benefit), of $0.1 million, ($0.7) million and ($11.7) million for fiscal years 2014, 2013 and 2012, respectively. We also recorded penalty expense (benefit) of ($0.1) million and ($4.9) million during fiscal years 2014 and 2012, respectively. During fiscal year 2013, our recorded penalty expense was immaterial. Accrued interest and penalties at December 28, 2014, December 29, 2013, and December 30, 2012, were approximately $2.7 million, $2.7 million and $3.5 million, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits consists of the following:


	Years Ended
	December 28,		December 29,		December 30,
(in thousands)	2014		2013		2012
Balance at beginning of fiscal year	$	12,889	$	8,649	$	30,463
Increases based on tax positions in prior year		1		7,631		—
Decreases based on tax positions in prior year		(363)		(935)		(9,933)
Increases based on tax positions in current year		1,357		1,386		745
Settlements		(49)		(259)		(643)
Lapse of statute of limitations		(789)		(3,583)		(11,983)
Balance at end of fiscal year	$	13,046	$	12,889	$	8,649

As of December 28, 2014, the following tax years and related taxing jurisdictions were open:


	Open	Years Under
Taxing Jurisdiction	Tax Year	Exam
Federal	2011-2014	—
California	2010-2014	—
Other States	2006-2014	2011-2012