Entity information:
Income Taxes
Earnings before income taxes is comprised of the following amounts:
 
 
For The Years Ended December 31,
(In thousands)
 
2017
 
2016
 
2015
United States
 
$
40,954

 
$
80,666

 
$
92,488


The income tax (benefit) provision is comprised of the following:
 
 
For The Years Ended December 31,
(In thousands)
 
2017
 
2016
 
2015
Current
 
 
 
 
 
 
Federal
 
$
(16,729
)
 
$
7,434

 
$
15,579

State
 
933

 
5,351

 
4,855

Foreign
 
—

 
—

 
(10
)
    Total current
 
(15,796
)
 
12,785

 
20,424

Deferred
 
 
 
 
 
 
Federal
 
(36,810
)
 
15,573

 
13,006

State
 
(3,779
)
 
2,754

 
3,075

    Total deferred
 
(40,589
)
 
18,327

 
16,081

Income tax (benefit) provision
 
$
(56,385
)
 
$
31,112

 
$
36,505


The income tax provision or benefit differs from the amount computed by applying the statutory federal income tax rate of 35.0% to earnings before income taxes due to the following:
 
 
For The Years Ended December 31,
(In thousands)
 
2017
 
2016
 
2015
Tax at the statutory rate
 
$
14,334

 
$
28,233

 
$
32,371

Federal rate change
 
(70,055
)
 
—

 
—

State and local taxes, net of federal income tax impact
 
(1,201
)
 
3,046

 
3,753

Federal credits and net operating losses
 
(3,158
)
 
(2,850
)
 
3,593

Stock compensation
 
2,207

 
—

 
—

Other, net
 
1,488

 
2,683

 
(3,212
)
Income tax provision
 
$
(56,385
)
 
$
31,112

 
$
36,505


During 2017 and 2016, the valuation allowance for deferred tax assets decreased by $0.7 million and $0.6 million, respectively.
In March 2016 the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting. We adopted the standard during the first quarter of 2017. The standard requires all excess tax benefits and deficiencies to be recognized as income tax expense or benefit discretely in the reporting period in which they occur. During 2017, we recognized $2.2 million in tax expense for stock based compensation.
We use the flow-through method to account for investment tax credits earned on eligible expenditures. Under this method, the investment tax credits are recognized as a reduction to income tax expense in the year they are earned. During 2017, we recognized $2.4 million related to energy investment tax credits.
The tax effects of significant temporary differences creating deferred tax assets and liabilities at December 31 were:    
(In thousands)
 
2017
 
2016
Deferred tax assets:
 
 
 
 
Employee benefits
 
$
3,940

 
$
6,255

Postretirement employee benefits
 
17,132

 
27,370

Incentive compensation
 
5,194

 
11,356

Inventories
 
7,959

 
8,859

Pensions
 
2,516

 
8,338

State credit carryforwards
 
11,752

 
8,369

State net operating losses
 
3,088

 
1,462

Other
 
1,949

 
3,774

Total deferred tax assets
 
$
53,530

 
$
75,783

Valuation allowance
 
(3,733
)
 
(4,407
)
Deferred tax assets, net of valuation allowance
 
$
49,797

 
$
71,376

Deferred tax liabilities:
 
 
 
 
Plant and equipment
 
$
(153,885
)
 
$
(206,502
)
Intangible assets
 
(7,577
)
 
(14,136
)
Total deferred tax liabilities
 
(161,462
)
 
(220,638
)
Net deferred tax liabilities
 
$
(111,665
)
 
$
(149,262
)
 
Net deferred tax assets (liabilities) consist of:
(In thousands)
 
2017
 
2016
Non-current deferred tax assets1
 
6,863

 
2,910

Non-current deferred tax liabilities
 
(118,528
)
 
(152,172
)
Net non-current deferred tax liabilities
 
(111,665
)
 
(149,262
)
Net deferred tax liabilities
 
$
(111,665
)
 
$
(149,262
)

1 
Included in "Other assets, net" on our accompanying December 31, 2017 and 2016 Consolidated Balance Sheets.
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (Act). The Act made broad and complex changes to the U.S. tax code. For the year ended December 31, 2017, we recorded a tax benefit for the impact of the Act of approximately $70 million which represents the remeasurement of our net deferred tax liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%.
We have net investment tax credits associated with state jurisdictions totaling $11.1 million which expire between 2018 and 2033.
The following presents a roll forward of our unrecognized tax benefits and associated interest and penalties, $2.8 million of which is included in the "Accrued taxes" line item in non-current liabilities in our Consolidated Balance Sheets. The remaining $1.3 million consists of unrecorded receivables and certain tax attributes that are uncertain.
(In thousands)
 
Gross
Unrecognized
Tax Benefits,
Excluding
Interest and
Penalties
 
Interest
and
Penalties
 
Total Gross
Unrecognized
Tax Benefits
Balance at December 31, 2015
 
$
4,227

 
$
221

 
$
4,448

Change in prior year tax positions
 
619

 
36

 
655

Reductions as a result of a lapse of the applicable statute of limitations
 
(234
)
 
(20
)
 
(254
)
Change in current year tax positions
 
291

 
—

 
291

Balance at December 31, 2016
 
$
4,903

 
$
237

 
$
5,140

Change in prior year tax positions
 
(1,149
)
 
48

 
(1,101
)
Change in current year tax positions
 
320

 
—

 
320

Balance at December 31, 2017
 
$
4,074

 
$
285

 
$
4,359


Unrecognized tax benefits net of related deferred tax assets at December 31, 2017, if recognized, would favorably impact our effective tax rate by decreasing our tax provision by $3.6 million. For each of the years ended December 31, 2016 and 2015, if recognized, the balance of unrecognized tax benefits would favorably impact our effective tax rate by $4.1 million and $3.2 million, respectively. We reflect accrued interest related to tax obligations, as well as penalties, in our provision for income taxes. For the years ended December 31, 2017, 2016, and 2015, we accrued interest of less than $0.1 million each year in our income tax provision. We recorded no penalties in the years ended December 31, 2017, 2016, and 2015.
We have certain state benefits related to filing positions taken which have not been recognized on the balance sheet. Although the uncertain tax position was not reflected in the balance sheet as a recorded liability, it is disclosed in the tabular roll forward for unrecognized tax benefits.
We have operations in many states within the U.S. and are subject, at times, to tax audits in these jurisdictions. With a few exceptions, we are no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2014. We expect that the outcome of any examination will not have a material effect on our consolidated financial statements. Although the timing of resolution of audits is not certain, we evaluate all audit issues in the aggregate, along with the expiration of applicable statutes of limitations, and estimate that it is reasonably possible the total gross unrecognized tax benefits could decrease by approximately $0.9 million within the next 12 months.