Income Taxes

We file a consolidated federal income tax return, consolidated unitary returns in certain states, and other separate state income tax returns for certain of our subsidiary companies.

The provision for income taxes consisted of the following:



	For the years ended December 31,
(in thousands)	2014			2013			2012

Current:
Federal	$	2,358		$	319		$	8,171
State and local	(7,825		)	(3,102		)	517
Total current income tax provision	(5,467		)	(2,783		)	8,688
Deferred:
Federal	7,904			(4,842		)	7,185
Other	(405		)	(223		)	1,112
Total deferred income tax provision	7,499			(5,065		)	8,297
Provision (benefit) for income taxes	$	2,032		$	(7,848	)	$	16,985

The difference between the statutory rate for federal income tax and the effective income tax rate was as follows:



	For the years ended December 31,
	2014		2013		2012

Statutory rate	35.0	%	35.0	%	35.0	%
Effect of:
State and local income taxes, net of federal tax benefit	5.1		4.4		2.1
Nondeductible expenses	19.4		(9.6	)	0.4
Reserve for uncertain tax positions	(48.7	)	35.7		(7.3	)
Amended returns and settlements	—		16.6		—
Other	5.8		9.5		(0.4	)
Effective income tax rate	16.6	%	91.6	%	29.8	%

Nondeductible expenses in 2014 includes amounts for transaction costs related to the Journal Transactions.

The approximate effect of the temporary differences giving rise to deferred income tax assets (liabilities) were as follows:



	As of December 31,
(in thousands)	2014			2013

Temporary differences:
Property, plant and equipment	$	(42,418	)	$	(44,448	)
Goodwill and other intangible assets	(9,803		)	(2,684		)
Investments, primarily gains and losses not yet recognized for tax purposes	7,162			4,750
Accrued expenses not deductible until paid	13,011			11,865
Deferred compensation and retiree benefits not deductible until paid	66,002			37,041
Other temporary differences, net	4,135			25
Total temporary differences	38,089			6,549
Federal and state net operating loss carryforwards	13,605			21,123
Valuation allowance for state deferred tax assets	(912		)	(1,078		)
Net deferred tax asset	$	50,782		$	26,594

Total federal operating loss carryforwards were $37 million and state operating loss carryforwards were $246 million at December 31, 2014. Our federal tax loss carryforwards and our state tax loss carryforwards expire through 2034. Because we file separate state income tax returns for certain of our subsidiary companies, we are not able to use state tax losses of a subsidiary company to offset state taxable income of another subsidiary company.

Deferred tax assets totaled $51 million at December 31, 2014. Management believes that it is more likely than not that we will realize the benefits of our federal deferred tax assets and therefore has not recorded a valuation allowance for our federal deferred tax assets. If economic conditions worsen, future estimates of taxable income could be lower than our current estimates, which may require valuation allowances to be recorded in future reporting periods.

We recognize state net operating loss carryforwards as deferred tax assets, subject to valuation allowances. At each balance sheet date, we estimate the amount of carryforwards that are not expected to be used prior to expiration of the carryforward period. The tax effect of the carryforwards that are not expected to be used prior to their expiration is included in the valuation allowance.

During 2013, deferred tax assets relating to employee share-based compensation from the vesting of RSU's and the exercise of stock options have not been recognized since we were in a net tax loss position in 2013. The additional tax benefits were reflected as net operating loss carryforwards when we filed our 2013 tax return, but the additional tax benefits are not recorded under GAAP until the tax deduction reduces taxes payable. When the tax benefit is recognized, it will be recorded as additional paid-in capital. The amount of unrecognized tax deductions for the year ended December 31, 2014 and 2013 was approximately $23 million. Tax deductions of $22.9 million related to share-based compensation for exercises of grants in 2014 have been recognized in accordance with the ordering method in GAAP resulting in a $8.6 million adjustment to additional paid-in capital.

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:



	For the years ended December 31,
(in thousands)	2014			2013			2012

Gross unrecognized tax benefits at beginning of year	$	14,824		$	16,386		$	21,240
Increases in tax positions for prior years	—			2,692			623
Decreases in tax positions for prior years	(525		)	—			(1,287		)
Decreases from lapse in statute of limitations	(7,275		)	(2,670		)	(4,190		)
Settlements	—			(1,584		)	—
Gross unrecognized tax benefits at end of year	$	7,024		$	14,824		$	16,386

The total amount of net unrecognized tax benefits that, if recognized, would affect the effective tax rate was $3 million at December 31, 2014. We accrue interest and penalties related to unrecognized tax benefits in our provision for income taxes. At December 31, 2014 and 2013, we had accrued interest related to unrecognized tax benefits of $1.2 million and $2.4 million, respectively.

We file income tax returns in the U.S. and in various state and local jurisdictions. We are routinely examined by tax authorities in these jurisdictions. At December 31, 2014, we are no longer subject to federal income tax examinations for years prior to 2012. For state and local jurisdictions, we are generally no longer subject to income tax examinations for years prior to 2010.

In 2014 and 2013, we recognized $6.0 million and $3.1 million, respectively, of previously unrecognized net tax benefits primarily due to the lapse of the statute of limitations in certain tax jurisdictions.

Due to the potential for resolution of federal and state examinations, and the expiration of various statutes of limitation, it is reasonably possible that our gross unrecognized tax benefits balance may change within the next twelve months by as much as $2.6 million.