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The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the years ended December 31 for the following reasons (in millions): 

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Cash payments for income taxes were $4 million in 2013, $4 million in 2012 and zero in 2011. 

The net deferred taxes below include a current net deferred tax asset of $120 million and a long-term net deferred tax liability of $605 million at December 31, 2013, and a current net deferred tax asset of $107 million and a long-term net deferred tax liability of $481 million at December 31, 2012. 

The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions): 

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At December 31, 2013, we had U.S. Federal regular and alternative minimum tax net operating loss (“NOL”) carryforwards of $456 million and $446 million, respectively, which begin to expire in 2025. In addition, at December 31, 2013, we had deferred tax assets associated with state NOLs of $9 million, which begin to expire in 2016. Our NOL carryforwards at December 31, 2013 include an unrecorded benefit of approximately $9 million related to stock-based compensation that will be recorded in equity when, and to the extent, realized. Section 382 of the Internal Revenue Code imposes limitations on a corporation’s ability to use its NOL carryforwards if it experiences an “ownership change.” As of December 31, 2013, our valuation allowance did not include any amounts attributable to this limitation; however, if an “ownership change” were to occur in the future, the ability to use our NOLs could be limited. 

In evaluating the realizability of the deferred tax assets, we assess whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. We consider, among other things, the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. At December 31, 2013, we continue to maintain a $20 million valuation allowance to reduce the deferred tax assets to an amount that we consider is more likely than not to be realized. Our valuation allowance at December 31, 2013 is related to capital loss carryforwards which expire in 2015 and 2016. 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follow (in millions): 

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Interest and penalties accrued on unrecognized tax benefits were not significant. If recognized, $9 million of the unrecognized tax benefits at December 31, 2013 would impact our effective tax rate. We do not expect any significant change in the amount of the unrecognized tax benefits within the next twelve months. As a result of NOLs and statute of limitations in our major tax jurisdictions, years 2002 through 2012 remain subject to examination by the relevant tax authorities. 

