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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

(4) Income Taxes

Our income tax benefit was $15.7 million for the year ended December 31, 2024 compared to an expense of $229.2 million in 2023 and an expense of $230.5 million in 2022. The effective income tax rate is influenced by a variety of factors including geographic sources and relative magnitude of these sources of income as well as a reduction in our valuation allowances related to a change in the realizability of our federal and Pennsylvania deferred tax assets. Additionally, in the current year we recorded a tax benefit related to credits generated in the current year and as part of a look-back study. The state tax reconciling item includes tax expense related to a tax rate change in Louisiana which is equally offset by a change in the Louisiana valuation allowance included on the valuation allowance line. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

Federal statutory tax rate

 

21.0

 

%

 

21.0

 

%

 

21.0

 

%

State, net of federal benefit

 

13.9

 

 

 

(0.1

)

 

 

1.0

 

 

Equity compensation and executive compensation disallowance

 

(0.5

)

 

 

(0.3

)

 

 

0.2

 

 

Valuation allowances

 

(28.1

)

 

 

0.2

 

 

 

(5.5

)

 

Tax credits

 

(12.7

)

 

 

—

 

 

 

(0.4

)

 

Permanent differences and other

 

0.1

 

 

 

—

 

 

 

—

 

 

Effective tax rate

 

(6.3

)

%

 

20.8

 

%

 

16.3

 

%

Income tax (benefit) expense attributable to income before income taxes consists of the following (in thousands):

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Current

 

 

 

 

 

 

 

 

Federal

$

3,329

 

 

$

—

 

 

$

—

 

State

 

4,836

 

 

 

1,547

 

 

 

14,688

 

 

$

8,165

 

 

$

1,547

 

 

$

14,688

 

 

 

 

 

 

 

 

 

 

Deferred

 

 

 

 

 

 

 

 

Federal

$

(7,310

)

 

$

230,563

 

 

$

245,839

 

State

 

(16,590

)

 

 

(2,909

)

 

 

(30,067

)

 

 

(23,900

)

 

 

227,654

 

 

 

215,772

 

Income tax (benefit) expense

$

(15,735

)

 

$

229,201

 

 

$

230,460

 

At December 31, 2024, deferred tax liabilities exceeded deferred tax assets by $537.4 million. We continue to evaluate the realizability of our federal and state deferred tax assets. As of December 31, 2024, we have a state valuation allowance of $125.0 million related to state tax attributes in Louisiana, Oklahoma, Texas and West Virginia. As of December 31, 2024, we have no remaining federal or Pennsylvania valuation allowances. The net change in our deferred tax asset valuation allowances was a decrease of $70.4 million for the year ended December 31, 2024 compared to an increase of $2.7 million in 2023 and a decrease of $78.3 million in 2022. The current year decrease in the valuation allowance was a result of our ability to demonstrate strong pre-tax earnings in recent history which resulted in a release of all federal and Pennsylvania valuation allowances.

At December 31, 2024, we have federal NOL carryforwards of $1.4 billion, all of which were generated after 2017 that do not expire. We have state NOL carryforwards in Pennsylvania of $773.2 million that expire between 2031 and 2042 and in Louisiana, we have state NOL carryforwards of $1.7 billion that do not expire. We file a consolidated tax return in the United States federal jurisdiction. We file separate company state income tax returns in Louisiana and Pennsylvania 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 2021 and after, and we are subject to various state tax examinations for years 2019 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 material accrued interest or penalties related to tax amounts as of December 31, 2024 or December 31, 2023. Throughout 2024, 2023 and 2022, our unrecognized tax benefits were not material.

On July 12, 2022, the Commonwealth of Pennsylvania enacted legislation to reduce the corporate net income tax rate from 9.99% to 8.99% in 2023, further reducing by 0.5% per year beginning in 2024, and becoming 4.99% in 2031 and each year thereafter.

Significant components of deferred tax assets and liabilities are as follows (in thousands):

 

December 31,

 

 

2024

 

 

2023

 

Deferred tax assets:

 

 

 

 

 

Net operating loss carryforward

$

424,487

 

 

$

538,340

 

Divestiture contract obligation

 

87,311

 

 

 

107,067

 

Deferred compensation

 

14,480

 

 

 

17,342

 

Equity compensation

 

8,155

 

 

 

6,767

 

Asset retirement obligations

 

29,096

 

 

 

25,614

 

Interest expense carryforward

 

10,830

 

 

 

19,861

 

Lease right-of-use liabilities

 

26,726

 

 

 

6,023

 

Tax credits

 

31,941

 

 

 

10,104

 

Other

 

5,878

 

 

 

6,292

 

Valuation allowances:

 

 

 

 

 

Federal

 

—

 

 

 

(23,396

)

State, net of federal benefit

 

(124,979

)

 

 

(172,001

)

Total deferred tax assets

 

513,925

 

 

 

542,013

 

Deferred tax liabilities:

 

 

 

 

 

Depreciation and depletion

 

(1,010,139

)

 

 

(998,886

)

Unrealized mark-to-market gain

 

(14,568

)

 

 

(96,545

)

Lease right-of-use assets

 

(26,065

)

 

 

(5,184

)

Other

 

(531

)

 

 

(2,686

)

Total deferred tax liabilities

 

(1,051,303

)

 

 

(1,103,301

)

Net deferred tax liability

$

(537,378

)

 

$

(561,288

)