Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The (provision for)/benefit from income taxes consisted of the following:



	2013				2012			2011
Current
U.S. federal	$	(83,119	)		$	(76,381	)	$	(27,224	)
State	(4,315		)		(4,569		)	(624		)
Foreign	(400		)		(288		)	(342		)
	(87,834		)		(81,238		)	(28,190		)
Deferred
U.S. federal	39,567				(2,598		)	(2,079		)
State	18,320				(595		)	(1,066		)
Foreign	(5,119		)		(55		)	(32		)
	52,768				(3,248		)	(3,177		)
Changes in valuation allowance	(14,595		)	(a)	(257		)	679
Total	$	(49,661	)		$	(84,743	)	$	(30,688	)


(a)	The increase in the valuation allowance during 2013 was primarily related to Georgia investment tax credits earned on the CSE project, the majority of which are fully reserved.

A reconciliation of the U.S. federal statutory income tax rate to the actual income tax rate was as follows:



	2013		2012		2011
U.S. federal statutory income tax rate	35.0	%	35.0	%	35.0	%
REIT income not subject to federal tax	(11.0	)	(7.3	)	(10.6	)
Manufacturing deduction	(2.5	)	(2.4	)	—
Other	2.0		1.0		(1.0	)
Effective tax rate before non-routine items	23.5	%	26.3	%	23.4	%
Installment note prepayment	(2.4	)	—		(3.6	)
Built-in gains tax holiday	—		—		(1.9	)
AFMC for CBPC exchange	(4.9	)	(3.3	)	(1.9	)
Taxing authority settlements and unrecognized tax benefit adjustments	—		—		(5.3	)
Gain related to consolidation of New Zealand joint venture	(1.5	)	—		—
Other	(1.7	)	0.8		(0.7	)
Income tax rate as reported	13.0	%	23.8	%	10.0	%

The nature of the temporary differences and the resulting net deferred tax asset for the two years ended December 31, were as follows:



	2013			2012
Gross deferred tax assets:
Liabilities for dispositions and discontinued operations	$	28,050		$	29,944
Pension, postretirement and other employee benefits	43,058			66,354
Foreign and state NOL carryforwards	85,801			18,023
Tax credit carryforwards	52,682			4,429
Other	29,871			8,736
Total gross deferred tax assets	239,462			127,486
Less: Valuation allowance	(33,889		)	(19,294		)
Total deferred tax assets after valuation allowance	205,573			108,192
Gross deferred tax liabilities:
Accelerated depreciation	(57,695		)	(61,414		)
Repatriation of foreign earnings	(9,065		)	(5,428		)
New Zealand forests, roads and carbon credits	(85,681		)	—
Other	(12,607		)	(4,461		)
Total gross deferred tax liabilities	(165,048		)	(71,303		)
Net deferred tax asset	$	40,525		$	36,889
Current portion of deferred tax asset	$	39,100		$	15,845
Noncurrent portion of deferred tax asset	10,720			26,792
Noncurrent portion of deferred tax liability	(9,295		)	(5,748		)
Net deferred tax asset	$	40,525		$	36,889

Included above are the following foreign and state net operating loss (“NOL”) and tax credit carryforwards as of December 31, 2013:



Item	Gross Amount		Valuation Allowance			Expiration
RNZ NOL Carryforwards (a)	$	6,342	$	(1,776	)	None
State NOL Carryforwards (a)	243,087		(7,525		)	2014 - 2019
New Zealand JV NOL Carryforwards	273,212		—			None
State Tax Credits	26,000		(24,588		)	2014 - 2023
Cellulosic Biofuel Producer Credit	26,682		—			2016
Total Valuation Allowance			$	(33,889	)


(a)	Fully reserved at December 31, 2013.

A reconciliation of the beginning and ending unrecognized tax benefits for the three years ended December 31 is as follows:



	2013			2012		2011
Balance at January 1,	$	6,580		$	6,580	$	22,580
Decreases related to prior year tax positions	(800		)	—		(16,000		)	(a)
Increases related to prior year tax positions	4,767			—		—
Balance at December 31,	$	10,547		$	6,580	$	6,580


(a)	During 2011, the Company received a final examination report from the IRS regarding its TRS 2009 tax return. As a result, Rayonier reversed the uncertain tax liability recorded in 2009 relating to the taxability of the AFMC and recognized a $16 million tax benefit in the third quarter of 2011.

The following table provides detail of the tax years that remain open to examination by the IRS and other significant taxing jurisdictions: