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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes |
(6) | Income Taxes
Our income tax benefit was $30.5 million for the year ended December 31, 2018 compared to $251.0 million in 2017 and $280.8 million in 2016. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:
| Year Ended December 31, |
| 2018 |  | 2017 |  |  | 2016 |
Federal statutory tax rate | 21.0 | % |  | 35.0 | % |  |  | 35.0 | %
Federal rate change | — |  |  | (406.7 | ) |  |  | — |
State | (0.3 | ) |  | (0.7 | ) |  |  | 3.0 |
State rate and law change | 0.9 |  |  | (1.3 | ) |  |  | 1.0 |
Non-deductible executive compensation | — |  |  | 0.7 |  |  |  | (0.2 | )
Non-deductible MRD transaction costs | — |  |  | — |  |  |  | (0.6 | )
Valuation allowances | (0.4 | ) |  | 36.8 |  |  |  | (2.5 | )
Equity compensation | (0.1 | ) |  | 30.2 |  |  |  | (0.7 | )
Goodwill impairment | (19.4 | ) |  | — |  |  |  | — |
Other | — |  |  | 0.3 |  |  |  | — |
Consolidated effective tax rate | 1.7 | % |  | (305.7 | %) |  |  | 35.0 | %
Income tax (benefit) expense attributable to (loss) income before income taxes consists of the following (in thousands):
|  |  | 2018 |  |  |  | 2017 |  |  |  | 2016 |
|  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |  |  | Current |  |  | Deferred |  |  | Total |
U.S. federal |  | $ | — |  |  | $ | (25,322 | ) |  | $ | (25,322 | ) |  | $ | — |  |  | $ | (302,507 | ) |  | $ | (302,507 | ) |  | $ | — |  |  | $ | (266,105 | ) |  | $ | (266,105 | )
U.S. state and local |  |  | — |  |  |  | (5,167 | ) |  |  | (5,167 | ) |  |  | 17 |  |  |  | 51,464 |  |  |  | 51,481 |  |  |  | 98 |  |  |  | (14,743 | ) |  |  | (14,645 | )
Total |  | $ | — |  |  | $ | (30,489 | ) |  | $ | (30,489 | ) |  | $ | 17 |  |  | $ | (251,043 | ) |  | $ | (251,026 | ) |  | $ | 98 |  |  | $ | (280,848 | ) |  | $ | (280,750 | )
Significant components of deferred tax assets and liabilities are as follows:
| December 31, |
| 2018 |  |  | 2017 |
| (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforward | $ | 542,847 |  |  | $ | 413,672 |
Deferred compensation |  | 19,844 |  |  |  | 24,704 |
Equity compensation |  | 8,152 |  |  |  | 5,269 |
AMT credits and other credits |  | 3,296 |  |  |  | 7,264 |
Asset retirement obligation |  | 78,126 |  |  |  | 69,398 |
Other |  | 30,492 |  |  |  | 18,806 |
Valuation allowances: |  |  |  |  |  |  |
Federal |  | (18,975 | ) |  |  | (31,308 | )
State, net of federal benefit |  | (101,372 | ) |  |  | (93,826 | )
Total deferred tax assets |  | 562,410 |  |  |  | 413,979 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation, depletion and investments |  | (1,207,784 | ) |  |  | (1,105,494 | )
Cumulative mark-to-market gain |  | (21,294 | ) |  |  | (1,841 | )
Other |  | — |  |  |  | — |
Total deferred tax liabilities |  | (1,229,078 | ) |  |  | (1,107,335 | )
Net deferred tax liability | $ | (666,668 | ) |  | $ | (693,356 | )
On December 22, 2017, the 2017 Tax Act 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 in the year ended December 31, 2017. At December 31, 2018, deferred tax liabilities exceeded deferred tax assets by $666.7 million. As of December 31, 2018, we have a state valuation allowance of $101.4 million related to state tax attributes in Louisiana, Oklahoma, Pennsylvania, Texas and West Virginia. As of December 31, 2018, we have federal valuation allowances of $19.0 million primarily related to our federal net operating loss carryforward and charitable contribution carryforward. See the table below for activity related to these valuation allowances. The changes in our deferred tax asset valuation allowances are as follows (in thousands):
|  | 2018 |  |  |  | 2017 |  |  |  | 2016 |
Balance at the beginning of the year | $ | (125,134 | ) |  | $ | (107,174 | ) |  | $ | (87,623 | )
Charged to provision for income taxes: |  |  |  |  |  |  |  |  |  |  |
State net operating loss carryforwards |  | (23,926 | ) |  |  | (11,612 | ) |  |  | (17,374 | )
Federal net operating carryforwards |  | 11,716 |  |  |  | 15,385 |  |  |  | (1,100 | )
Other state valuation allowances |  | 16,380 |  |  |  | (23,790 | ) |  |  | 500 |
Other federal valuation allowances |  | 494 |  |  |  | (247 | ) |  |  | (477 | )
Other |  | 123 |  |  |  | 2,304 |  |  |  | (1,100 | )
Balance at the end of the year | $ | (120,347 | ) |  | $ | (125,134 | ) |  | $ | (107,174 | )
At December 31, 2018, we had federal net operating loss (“NOL”) carryforwards of $2.0 billion that expire between 2019 and 2037 and also include $520.1 million of NOL carryforwards that do not expire. We have state NOL carryforwards in Pennsylvania of $882.7 million that expire between 2025 and 2038 and in Louisiana, we have $338.6 million that expire between 2034 and 2038. 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 2015 and after and we are subject to various state tax examinations for years 2014 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 in 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, 2018. Throughout 2018 and 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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