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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes |
(5) | Income Taxes
Our income tax benefit was $280.8 million for the year ended December 31, 2016 compared to income tax benefit of $338.7 million in 2015 and income tax expense of $396.5 million in 2014. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:
| Year Ended December 31, |
| 2016 |  | 2015 |  |  | 2014 |
Federal statutory tax rate | 35.0 | % |  | 35.0 | % |  |  | 35.0 | %
State | 3.0 |  |  | 4.3 |  |  |  | 3.1 |
State apportionment rate change | 1.0 |  |  | (0.2 | ) |  |  | (0.2 | )
Non-deductible executive compensation | (0.2 | ) |  | (0.1 | ) |  |  | 0.2 |
Non-deductible MRD transaction costs | (0.6 | ) |  | — |  |  |  | — |
Valuation allowances | (2.5 | ) |  | (6.8 | ) |  |  | 0.2 |
Deficits in equity compensation | (0.7 | ) |  | — |  |  |  | — |
Other | — |  |  | — |  |  |  | 0.2 |
Consolidated effective tax rate | 35.0 | % |  | 32.2 | % |  |  | 38.5 | %
Income tax (benefit) expense attributable to income before income taxes consists of the following (in thousands):
|  |  | 2016 |  |  |  | 2015 |  |  |  | 2014 |
|  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | — |  |  | $ | (266,105 | ) |  | $ | (266,105 | ) |  | $ | — |  |  | $ | (328,257 | ) |  | $ | (328,257 | ) |  | $ | — |  |  | $ | 361,152 |  |  | $ | 361,152 |
U.S. state and local |  |  | 98 |  |  |  | (14,743 | ) |  |  | (14,645 | ) |  |  | 29 |  |  |  | (10,449 | ) |  |  | (10,420 | ) |  |  | 1 |  |  |  | 35,350 |  |  |  | 35,351 |
Total |  | $ | 98 |  |  | $ | (280,848 | ) |  | $ | (280,750 | ) |  | $ | 29 |  |  | $ | (338,706 | ) |  | $ | (338,677 | ) |  | $ | 1 |  |  | $ | 396,502 |  |  | $ | 396,503 |
Significant components of deferred tax assets and liabilities are as follows:
| December 31, |
| 2016 |  |  | 2015 |
| (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforward | $ | 478,203 |  |  | $ | 173,503 |
Deferred compensation |  | 50,808 |  |  |  | 45,413 |
Equity compensation |  | 29,528 |  |  |  | 25,940 |
AMT credits and other credits |  | 13,644 |  |  |  | 4,437 |
Asset retirement obligation |  | 99,000 |  |  |  | 101,142 |
Cumulative mark-to-market loss |  | 73,404 |  |  |  | — |
Other |  | 39,922 |  |  |  | 10,163 |
Valuation allowances: |  |  |  |  |  |  |
Federal |  | (43,600 | ) |  |  | (42,500 | )
State, net of federal benefit |  | (58,424 | ) |  |  | (41,516 | )
Deferred compensation plans and other |  | (5,150 | ) |  |  | (3,607 | )
Total deferred tax assets |  | 677,335 |  |  |  | 272,975 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation, depletion and investments |  | (1,619,922 | ) |  |  | (940,482 | )
Cumulative mark-to-market gain |  | — |  |  |  | (109,845 | )
Other |  | (756 | ) |  |  | (595 | )
Total deferred tax liabilities |  | (1,620,678 | ) |  |  | (1,050,922 | )
Net deferred tax liability | $ | (943,343 | ) |  | $ | (777,947 | )
At December 31, 2016, deferred tax liabilities exceeded deferred tax assets by $943.3 million. As of December 31, 2016, we have a valuation allowance of $4.2 million on the deferred tax asset related to our deferred compensation plan for planned future distributions to certain executives to the extent that their estimated future compensation plus distribution amounts would exceed the $1.0 million deductible limit provided under I.R.C. Section 162(m). As of December 31, 2016, we have a full valuation allowance of $24.5 million in net operating loss carryforwards and state credits for California, Colorado, Mississippi, New Mexico, Oklahoma and West Virginia where we do not expect to generate any taxable income in the future due to completed or anticipated sales. We also have a $1.5 million valuation allowance against our Louisiana net operating loss carryfowards related to our activity in Louisiana prior to the MRD Merger. During 2016, we adjusted our valuation allowance related to our Pennsylvania net operating loss carryforwards to $32.4 million due to the low commodity price environment and the limitation Pennsylvania places on future utilization of net operating loss carryforwards. The change in our deferred tax asset valuation allowances are as follows (in thousands):
|  | 2016 |  |  |  | 2015 |  |  |  | 2014 |
Balance at the beginning of the year | $ | (87,623 | ) |  | $ | (16,599 | ) |  | $ | (14,781 | )
Charged to provision for income taxes: |  |  |  |  |  |  |  |  |  |  |
State net operating loss carryforwards |  | (17,374 | ) |  |  | (30,457 | ) |  |  | (5,800 | )
Federal net operating carryforwards |  | (1,100 | ) |  |  | (42,500 | ) |  |  | — |
Other state valuation allowances |  | 500 |  |  |  | (1,050 | ) |  |  | — |
Other federal valuation allowances |  | (477 | ) |  |  | (511 | ) |  |  | 363 |
Rabbi trust valuation allowance |  | (1,066 | ) |  |  | 3,494 |  |  |  | 3,619 |
Other |  | (34 | ) |  |  | — |  |  |  | — |
Balance at the end of the year | $ | (107,174 | ) |  | $ | (87,623 | ) |  | $ | (16,599 | )
At December 31, 2016, we had federal and state net operating loss (“NOL”) carryforwards of $1.2 billion and alternative minimum tax (“AMT”) NOL carryforwards of $1.0 billion that expire between 2018 and 2035. Our federal deferred tax asset related to regular NOL carryforwards at December 31, 2016 was $403.4 million, after the adoption of ASU 2016-9. At December 31, 2016, we have AMT credit carryforwards of $9.7 million that are not subject to limitation or expiration. We file consolidated tax returns in the United States federal jurisdiction. We file separate company state income tax returns in Louisiana, Mississippi, Pennsylvania and Virginia and file consolidated or unitary state income tax returns in Oklahoma, Texas and West Virginia. We are subject to U.S. Federal income tax examinations for the years 2013 and after and we are subject to various state tax examinations for years 2012 and after. We have not extended the statute of limitation period in any income tax jurisdiction. Our policy is to recognize interest related to income tax expense on interest expense and penalties in general and administrative expense. We do not have any accrued interest or penalties related to tax amounts as of December 31, 2016. Throughout 2016, our unrecognized tax benefits were not material. In September 2016, we completed the MRD Merger. For federal income tax purposes, the merger qualified as a tax-free merger and we acquired carryover tax basis in MRD’s assets and liabilities. MRD had a net deferred tax asset resulting from its federal net operating loss estimated at $12.4 million through the date of acquisition. The merger resulted in a change of control for federal income tax purposes and the NOL’s usage will be subject to an annual limitation in part based on MRD’s value at the date of the merger. We anticipate 100% utilization of the NOL prior to expiration.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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