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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes |
(5) | Income Taxes
Our income tax benefit was $251.0 million for the year ended December 31, 2017 compared to $280.8 million in 2016 and $338.7 million in 2015. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:
| Year Ended December 31, |
| 2017 |  | 2016 |  |  | 2015 |
Federal statutory tax rate | 35.0 | % |  | 35.0 | % |  |  | 35.0 | %
Federal rate change | (406.7 | ) |  | — |  |  |  | — |
State | (0.7 | ) |  | 3.0 |  |  |  | 4.3 |
State rate and law change | (1.3 | ) |  | 1.0 |  |  |  | (0.2 | )
Non-deductible executive compensation | 0.7 |  |  | (0.2 | ) |  |  | (0.1 | )
Non-deductible MRD transaction costs | — |  |  | (0.6 | ) |  |  | — |
Valuation allowances | 36.8 |  |  | (2.5 | ) |  |  | (6.8 | )
Equity compensation | 30.2 |  |  | (0.7 | ) |  |  | — |
Other | 0.3 |  |  | — |  |  |  | — |
Consolidated effective tax rate | (305.7 | %) |  | 35.0 | % |  |  | 32.2 | %
Income tax (benefit) expense attributable to income before income taxes consists of the following (in thousands):
|  |  | 2017 |  |  |  | 2016 |  |  |  | 2015 |
|  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | — |  |  | $ | (302,507 | ) |  | $ | (302,507 | ) |  | $ | — |  |  | $ | (266,105 | ) |  | $ | (266,105 | ) |  | $ | — |  |  | $ | (328,257 | ) |  | $ | (328,257 | )
U.S. state and local |  |  | 17 |  |  |  | 51,464 |  |  |  | 51,481 |  |  |  | 98 |  |  |  | (14,743 | ) |  |  | (14,645 | ) |  |  | 29 |  |  |  | (10,449 | ) |  |  | (10,420 | )
Total |  | $ | 17 |  |  | $ | (251,043 | ) |  | $ | (251,026 | ) |  | $ | 98 |  |  | $ | (280,848 | ) |  | $ | (280,750 | ) |  | $ | 29 |  |  | $ | (338,706 | ) |  | $ | (338,677 | )
Significant components of deferred tax assets and liabilities are as follows:
| December 31, |
| 2017 |  |  | 2016 |
| (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforward | $ | 413,672 |  |  | $ | 478,203 |
Deferred compensation |  | 24,704 |  |  |  | 50,808 |
Equity compensation |  | 5,269 |  |  |  | 29,528 |
AMT credits and other credits |  | 7,264 |  |  |  | 13,644 |
Asset retirement obligation |  | 69,398 |  |  |  | 99,000 |
Cumulative mark-to-market loss |  | — |  |  |  | 73,404 |
Other |  | 18,806 |  |  |  | 39,922 |
Valuation allowances: |  |  |  |  |  |  |
Federal |  | (31,308 | ) |  |  | (48,750 | )
State, net of federal benefit |  | (93,826 | ) |  |  | (58,424 | )
Total deferred tax assets |  | 413,979 |  |  |  | 677,335 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation, depletion and investments |  | (1,105,494 | ) |  |  | (1,619,922 | )
Cumulative mark-to-market gain |  | (1,841 | ) |  |  | — |
Other |  | — |  |  |  | (756 | )
Total deferred tax liabilities |  | (1,107,335 | ) |  |  | (1,620,678 | )
Net deferred tax liability | $ | (693,356 | ) |  | $ | (943,343 | )
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. The law significantly reforms the Internal Revenue Code of 1986, as amended. The reduction in the corporate tax rate required a one-time revaluation of certain tax related assets and liabilities to reflect their value at the lower corporate tax rate of 21%. We reviewed all of the valuation allowances previously established at the corporate rate of 35% to reflect the appropriate new balances after the enactment of the new law. A one-time tax benefit was recorded related to the tax law changes in the amount of $334.0 million. Due to the complexities involved in accounting for the enactment of the new law, the SEC Staff Accounting Bulletin (“SAB”) 118 allows us to provide a provisional estimate for the year ending December 31, 2017. As of December 31, 2017, we have not completed our accounting for the tax effects of the new law and its impact on our deferred tax balances. We have made a reasonable estimate of the effect on our deferred tax balances. We will continue to analyze the impact of the new law and additional impacts will be recorded as they are identified during the measurement period as provided for in SAB 118. At December 31, 2017, deferred tax liabilities exceeded deferred tax assets by $693.4 million. As of December 31, 2017, we have a valuation allowance of $1.9 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, 2017, we have a state valuation allowance of $36.3 million related to state tax attributes in Oklahoma, Texas and West Virginia. During 2017, we adjusted our valuation allowance related to our Pennsylvania state tax attributes to be $57.5 million due to the low commodity price environment and the limitation Pennsylvania places on future utilization of net operating loss carryforwards. On October 18, 2017, the Supreme Court of Pennsylvania issued a decision on a case related to limiting net operating loss deductions to the greater of $3.0 million or 30 percent of taxable income. The Supreme Court ruled that the net operating loss deduction limitation violated the Uniformity Clause of the Pennsylvania Constitution and struck the $3.0 million flat cap limitation but not the percentage of taxable income limitation. The changes in our deferred tax asset valuation allowances are as follows (in thousands):
|  | 2017 |  |  |  | 2016 |  |  |  | 2015 |
Balance at the beginning of the year | $ | (107,174 | ) |  | $ | (87,623 | ) |  | $ | (16,599 | )
Charged to provision for income taxes: |  |  |  |  |  |  |  |  |  |  |
State net operating loss carryforwards |  | (11,612 | ) |  |  | (17,374 | ) |  |  | (30,457 | )
Federal net operating carryforwards |  | 15,385 |  |  |  | (1,100 | ) |  |  | (42,500 | )
Other state valuation allowances |  | (23,790 | ) |  |  | 500 |  |  |  | (1,050 | )
Other federal valuation allowances |  | (247 | ) |  |  | (477 | ) |  |  | (511 | )
Rabbi trust valuation allowance |  | 2,304 |  |  |  | (1,066 | ) |  |  | 3,494 |
Other |  | — |  |  |  | (34 | ) |  |  | — |
Balance at the end of the year | $ | (125,134 | ) |  | $ | (107,174 | ) |  | $ | (87,623 | )
At December 31, 2017, we had federal net operating loss (“NOL”) carryforwards of $1.5 billion that expire between 2018 and 2035 and an NOL in Pennsylvania of $872.6 million that expire between 2025 and 2036. We file consolidated tax returns in the United States federal jurisdiction. We file separate company state income tax returns in Louisiana, 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, 2017. Throughout 2017, our unrecognized tax benefits were not material.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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