Note 5. Income Taxes

Our income tax provision (benefit) is as follows:



	Year Ended December 31,
In thousands	2015			2014			2013
Current income tax expense (benefit)
Federal	$	(8,515	)	$	(42,500	)	$	393
State	160			(407		)	9,864
Total current income tax expense (benefit)	(8,355		)	(42,907		)	10,257

Deferred income tax expense (benefit)
Federal	(1,853,517		)	400,544			222,559
State	(78,662		)	29,429			(33		)
Total deferred income tax expense (benefit)	(1,932,179		)	429,973			222,526
Total income tax expense (benefit)	$	(1,940,534	)	$	387,066		$	232,783

At December 31, 2015, we had tax-effected federal net operating loss carryforwards (“NOLs”) totaling $52.6 million, state NOLs totaling $37.2 million, an estimated $48.9 million of enhanced oil recovery credits to carry forward related to our tertiary operations, an estimated $21.6 million of research and development credits, and $34.8 million of alternative minimum tax credits. Our state NOLs expire in various years, starting in 2020, although most do not begin to expire until 2033. Our enhanced oil recovery credits and research and development credits will begin to expire in 2023 and 2031, respectively.

At December 31, 2015, we had $15.7 million of excess tax benefits related to stock-based compensation that were 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, 2015 and 2014 balance sheet dates. As of December 31, 2015, we had $34.5 million of deferred tax assets associated with State of Louisiana net operating losses. As the result of falling commodity prices, combined with a new tax law enacted in the State of Louisiana effective June 30, 2015, which limits a company’s utilization of certain deductions, including our net operating loss carryforwards, we recognized tax valuation allowances totaling $33.6 million during 2015 to reduce the carrying value of our deferred tax assets. The valuation allowances will remain until the realization of future deferred tax benefits are more likely than not to become utilized.

As of December 31, 2015, we had an unrecognized tax benefit of $5.4 million. The unrecognized tax benefit was recorded during 2015 as a direct reduction of the associated deferred tax asset and, if recognized, would not materially affect our annual effective tax rate. The tax benefit from an uncertain tax position will only be recognized if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based upon the technical merits of the position. We currently do not expect a material change to the uncertain tax position within the next 12 months. Our policy is to recognize penalties and interest related to uncertain tax positions in income tax expense; however, no such amounts were accrued related to the uncertain tax position as of December 31, 2015. There were no unrecognized tax benefits as of December 31, 2014.

Significant components of our deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows:



	December 31,
In thousands	2015			2014
Deferred tax assets
Loss carryforwards – federal	$	52,580		$	44,076
Loss carryforwards – state	37,175			43,270
Tax credit carryover	34,837			34,837
Business credit carryforwards	70,452			42,817
Stock-based compensation	23,468			29,994
Other	34,236			32,656
Valuation allowance	(33,600		)	—
Total deferred tax assets	219,148			227,650

Deferred tax liabilities
Property and equipment	(1,004,330		)	(2,806,850		)
Derivative contracts	(50,081		)	(185,385		)
Other	(16,826		)	(11,984		)
Total deferred tax liabilities	(1,071,237		)	(3,004,219		)
Total net deferred tax liability	$	(852,089	)	$	(2,776,569	)

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	2015			2014		2013
Income tax provision (benefit) calculated using the federal statutory income tax rate	$	(2,214,094	)	$	357,895	$	224,833
State income taxes, net of federal income tax benefit	(117,624		)	25,368		13,518
Impairment of goodwill with no related tax basis	363,666			—		—
Valuation allowance	33,600			—		—
Other	(6,082		)	3,803		(5,568		)
Total income tax expense (benefit)	$	(1,940,534	)	$	387,066	$	232,783

We file consolidated and separate income tax returns in the U.S. federal jurisdiction and in many state jurisdictions. The statutes of limitation for our income tax returns for tax years ending prior to 2011 have lapsed and therefore are not available for examination by respective taxing authorities. We have not paid any significant interest or penalties associated with our income taxes.