INCOME TAXES

Following is a summary of the Company’s income tax expense for the years ended December 31:



(In Thousands)	2014			2013			2012
Current Income Tax Expense:
Federal	$	41,946		$	91,664		$	116,234
State	8,682			9,393			10,819
	50,628			101,057			127,053
Deferred Income Tax (Benefit):
Federal	(3,314		)	(35,941		)	(23,035		)
State	(3,843		)	(822		)	(206		)
	(7,157		)	(36,763		)	(23,241		)
	$	43,471		$	64,294		$	103,812

At December 31, 2011, the Company had a federal net operating loss (“NOL”) carryforward of approximately $31.2 million available to offset future taxable income. The entire NOL carryforward was utilized during 2012.

As a result of the extended bonus depreciation provisions in the Tax Increase Prevention Act of 2014, the Company paid more than anticipated for the 2014 federal tax liability. The 2014 act provided an estimated tax deferral of approximately $126.0 million. The Company filed for and received a refund of $100.0 million in January 2015.

Significant components of the Company’s deferred income tax liabilities and assets at December 31 are as follows:



(In Thousands)	2014			2013
Deferred Tax Liabilities:
Lease Merchandise and Property, Plant and Equipment	$	228,002		$	249,192
Goodwill & Other Intangibles	40,644			34,512
Investment in Partnership	61,342			—
Other, Net	1,866			2,782
Total Deferred Tax Liabilities	331,854			286,486
Deferred Tax Assets:
Accrued Liabilities	42,024			36,778
Advance Payments	14,272			15,400
Other, Net	7,713			8,032
Total Deferred Tax Assets	64,009			60,210
Less Valuation Allowance	(706		)	(682		)
Net Deferred Tax Liabilities	$	268,551		$	226,958

The Company’s effective tax rate differs from the statutory United States Federal income tax rate for the years ended December 31 as follows:



	2014		2013		2012
Statutory Rate	35.0	%	35.0	%	35.0	%
Increases (Decreases) in United States Federal Taxes
Resulting From:
State Income Taxes, Net of Federal Income Tax Benefit	2.6		3.1		2.5
Federal Tax Credits	(1.8	)	(1.7	)	(.1	)
Other, Net	(.1	)	(1.6	)	.1
Effective Tax Rate	35.7	%	34.8	%	37.5	%

The Company files a federal consolidated income tax return in the United States and the separate legal entities file in various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state and local tax examinations by tax authorities for years before 2011.

The following table summarizes the activity related to the Company’s uncertain tax positions:



(In Thousands)	2014			2013			2012
Balance at January 1,	$	1,960		$	1,258		$	1,412
Additions Based on Tax Positions Related to the Current Year	311			454			178
Additions for Tax Positions of Prior Years	928			423			83
Prior Year Reductions	(370		)	(5		)	(315		)
Statute Expirations	(94		)	(85		)	(83		)
Settlements	(91		)	(85		)	(17		)
Balance at December 31,	$	2,644		$	1,960		$	1,258

As of December 31, 2014 and 2013, the amount of uncertain tax benefits that, if recognized, would affect the effective tax rate is $2.1 million and $1.5 million, respectively, including interest and penalties.

During the years ended December 31, 2014 and 2013, the Company recognized interest and penalties of $286,000 and $76,000, respectively. During the year ended December 31, 2012, the Company recognized a net benefit of $126,000 related to interest and penalties. The Company had $499,000 and $278,000 of accrued interest and penalties at December 31, 2014 and 2013, respectively. The Company recognizes potential interest and penalties related to uncertain tax benefits as a component of income tax expense.