(5)	INCOME TAXES

Our income tax expense from continuing operations was $33.9 million for the year ended December 31, 2013 compared to $12.1 million in 2012 and $35.6 million in 2011. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:


	Year Ended December 31,
	2013		2012			2011
Federal statutory tax rate	35.0	%		35.0	%		35.0	%
State	(2.3	)		0.7			7.0
State apportionment rate change	(14.9	)		¾			¾
Non-deductible executive compensation	0.7			1.4			3.5
Valuation allowances	3.5			8.8			(0.4	)
Other	0.6			2.2			0.3
Consolidated effective tax rate	22.6	%		48.1	%		45.4	%

Income tax expense (benefit) attributable to income from continuing operations before income taxes consists of the following (in thousands):

		2013									2012							2011
		Current		Deferred			Total			Current			Deferred		Total		Current		Deferred		Total
U.S. federal	$	¾		$	58,527		$	58,527		$	—		$	11,873	$	11,873	$	—	$	30,055	$	30,055
U.S. state and local		(143	)		(24,527	)		(24,670	)		(1,778	)		1,959		181		637		4,865		5,502
Total	$	(143	)	$	34,000		$	33,857		$	(1,778	)	$	13,832	$	12,054	$	637	$	34,920	$	35,557

Significant components of deferred tax assets and liabilities are as follows:

	December 31,
	2013			2012
	(in thousands)
Deferred tax assets:
Current
Deferred compensation	$	9,128		$	6,192
Current portion of asset retirement obligation		1,854			961
Cumulative unrealized mark-to-market loss		15,193			¾
Net operating loss carryforward		23,079			¾
Other		7,937			8,896
Total current		57,191			16,049
Non-current
Net operating loss carryforward		57,266			56,402
Deferred compensation		91,094			72,904
Equity compensation		22,800			23,363
AMT credits and other credits		4,122			2,761
Non-current portion of asset retirement obligation		86,126			56,764
Cumulative unrealized mark-to-market gain		¾			(262	)
Other		1,116			1,379
Valuation allowance		(14,781	)		(9,052	)
Total non-current		247,743			204,259
Deferred tax liabilities:
Current
Net unrealized gain in AOCI related to hedge derivatives		(3,987	)		(49,124	)
Other		(1,789	)		(2,004	)
Cumulative unrealized mark-to-market gain		¾			(2,845	)
Total current		(5,776	)		(53,973	)
Non-current
Depreciation, depletion and investments		(1,010,757	)		(894,031	)
Cumulative unrealized mark-to-market gain		(6,424	)		¾
Other		(2,542	)		(4,008	)
Net unrealized gain in AOCI related to hedge derivatives		¾			(4,522	)
Total non-current		(1,019,724	)		(902,561	)
Net deferred tax liability	$	(720,566	)	$	(736,226	)

At December 31, 2013, deferred tax liabilities exceeded deferred tax assets by $720.6 million, with $4.0 million of deferred tax liability related to net deferred hedging gains included in AOCI. As of December 31, 2013, we have a $11.4 million valuation allowance on the deferred tax asset related to our deferred compensation plan for planned future distributions to certain executives to the extent that their estimated future compensation plus distribution amounts would exceed the $1.0 million deductible limit provided under I.R.C. Section 162(m). We also have a $3.0 million valuation allowance on our state net operating loss carryforwards and a $363,000 valuation allowance on a capital loss carryforward.

At December 31, 2013, we had regular net operating loss (“NOL”) carryforwards of $354.2 million and alternative minimum tax (“AMT”) NOL carryforwards of $304.7 million that expire between 2018 and 2033. Our deferred tax asset related to regular NOL carryforwards at December 31, 2013 was $39.0 million, which is net of the Accounting Standards Codification 718 Stock Compensation reduction for unrealized benefits, related to NOL’s created by excess tax deductions that have not generated current tax benefits. We expect to utilize approximately $250 million in federal net operating loss carryforwards and $245 million in alternative minimum tax net operating loss carryforwards in 2014 and have included the tax effect of this portion of our NOL in current deferred tax assets. At December 31, 2013, we have AMT credit carryforwards of $665,000 that are not subject to limitation or expiration.

We file consolidated tax returns in the United States federal jurisdiction. We file separate company state income tax returns in Louisiana, Mississippi, Pennsylvania and Virginia and file consolidated or unitary state income tax returns in New Mexico, Oklahoma, Texas and West Virginia. We are subject to U.S. Federal income tax examinations for the years 2010 and after and we are subject to various state tax examinations for years 2009 and after. We have not extended the statute of limitation period in any income tax jurisdiction. Our policy is to recognize interest related to income tax expense in interest expense and penalties in general and administrative expense. We do not have any accrued interest or penalties related to tax amounts as of December 31, 2013. Throughout 2013, our unrecognized tax benefits were not material.