Note 6. Income Taxes

Our income tax provision (benefit) is as follows:



	Year Ended December 31,
In thousands	2013			2012		2011
Current income tax expense (benefit)
Federal	$	393		$	57,720	$	(12,552	)
State	9,864			18,034		20,801
Total current income tax expense	10,257			75,754		8,249

Deferred income tax expense (benefit)
Federal	222,559			239,862		329,715
State	(33		)	15,881		12,748
Total deferred income tax expense	222,526			255,743		342,463
Total income tax expense	$	232,783		$	331,497	$	350,712

For federal income tax purposes, we structured the 2012 divestitures of our Bakken area assets and certain non-core assets as like-kind-exchange transactions for interests acquired in Thompson, Webster, Hartzog Draw and LaBarge fields in 2012 and the CCA Acquisition in 2013 (see Note 2, Acquisitions and Divestitures), thereby deferring the majority of the taxable gain on those divestitures. The increase in current taxes during 2012 is primarily due to the taxable gain recognized in the Bakken Exchange Transaction that we were unable to defer through a like-kind-exchange transaction.

At December 31, 2013, we had tax-effected federal net operating loss carryforwards ("NOLs") totaling $20.2 million, state NOLs totaling $41.4 million, an estimated $15.0 million of enhanced oil recovery credits to carry forward related to our tertiary operations, and $34.8 million of alternative minimum tax credits. Our state NOLs expire in various years, starting in 2018, although most do not begin to expire until 2024. Our enhanced oil recovery credits will begin to expire in 2025.

At December 31, 2013, we had $13.0 million of excess tax benefits related to stock-based compensation that was not recorded as an increase to additional paid-in capital in the period that the stock award vested and/or was exercised. At the time these excess tax benefits reduce current taxes payable and thus, are deemed to be realized by the Company, a corresponding increase to additional paid-in capital will be recognized.

Deferred income taxes reflect the available tax carryforwards and the temporary differences based on tax laws and statutory rates in effect at the December 31, 2013 and 2012 balance sheet dates. We believe that we will be able to realize all of our deferred tax assets at December 31, 2013, and therefore, have provided no valuation allowance against our deferred tax assets.

Significant components of our deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows:



	December 31,
In thousands	2013			2012
Deferred tax assets
Loss carryforwards – federal	$	20,247		$	—
Loss carryforwards – state	41,379			35,007
Tax credit carryover	34,837			34,837
Derivative contracts	21,341			7,252
Enhanced oil recovery credit carryforwards	14,974			17,346
Stock-based compensation	34,635			28,387
Other	37,679			37,226
Total deferred tax assets	205,092			160,055

Deferred tax liabilities
Property and equipment	(2,541,426		)	(2,277,388		)
Other	(10,206		)	(6,963		)
Total deferred tax liabilities	(2,551,632		)	(2,284,351		)
Total net deferred tax liability	$	(2,346,540	)	$	(2,124,296	)

Our reconciliation of income tax expense computed by applying the U.S. federal statutory rate and the reported effective tax rate on income from continuing operations is as follows:



	Year Ended December 31,
In thousands	2013			2012			2011
Income tax provision calculated using the federal statutory income tax rate	$	224,833		$	299,900		$	323,416
State income taxes, net of federal income tax benefit	13,518			30,955			29,555
Effect of statutory rate change	(4,178		)	(429		)	(578		)
Other	(1,390		)	1,071			(1,681		)
Total income tax expense	$	232,783		$	331,497		$	350,712

We file consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state jurisdictions. Our income tax returns for tax years ending 2010 through 2012 currently remain subject to examination by the appropriate taxing authorities. We have not paid any significant interest or penalties associated with our income taxes.