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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income tax expense (benefit) consists of the following:
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
| (In thousands)
Current: |  |  |  |  |
Federal | $ | (9 | ) |  | $ | 134 |  |  | $ | 475 |
State | — |  |  | — |  |  | — |
| (9 | ) |  | 134 |  |  | 475 |
Deferred: |  |  |  |  |
Federal | (11,667 | ) |  | 273,576 |  |  | 122,853 |
State | (4,447 | ) |  | 33,881 |  |  | 11,730 |
| (16,114 | ) |  | 307,457 |  |  | 134,583 |
Total income tax expense (benefit) | $ | (16,123 | ) |  | $ | 307,591 |  |  | $ | 135,058 |
The reconciliation of income taxes calculated at the U.S. federal tax statutory rate to the Company’s effective tax rate for the years ended December 31, 2015, 2014 and 2013, is set forth below:
| Year Ended December 31,
| 2015 |  | 2014 |  | 2013
| (%) |  | (In thousands) |  | (%) |  | (In thousands) |  | (%) |  | (In thousands)
U.S. federal tax statutory rate | 35.00 | % |  | $ | (19,730 | ) |  | 35.00 | % |  | $ | 285,064 |  |  | 35.00 | % |  | $ | 127,056 |
State income taxes, net of federal income tax benefit | 5.11 | % |  | (2,883 | ) |  | 2.81 | % |  | 22,901 |  |  | 2.06 | % |  | 7,469 |
Non-deductible stock-based compensation (shortfall) | (10.17 | )% |  | 5,734 |  |  | — | % |  | — |  |  | — | % |  | — |
Other | (1.34 | )% |  | 756 |  |  | (0.05 | )% |  | (374 | ) |  | 0.14 | % |  | 533 |
Annual effective tax expense (benefit) | 28.60 | % |  | $ | (16,123 | ) |  | 37.76 | % |  | $ | 307,591 |  |  | 37.20 | % |  | $ | 135,058 |
The effective tax rate was lower for the year ended December 31, 2015 due to the Company’s pre-tax loss and the impact of permanent differences. The permanent differences were primarily between amounts expensed for book purposes versus the amounts deductible for income tax purposes related to stock-based compensation vesting during the year ended December 31, 2015 at stock prices lower than the grant date values. The impact of these permanent differences was partially offset by a reduction in the North Dakota statutory tax rate in 2015. For the years ended December 31, 2014 and 2013, the Company’s effective tax rate differed from the federal statutory rate of 35% primarily due to state income taxes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2015 and 2014, were as follows:
| Year Ended December 31,
| 2015 |  | 2014
| (In thousands)
Deferred tax assets |  |  |
Net operating loss carryforward | $ | 121,248 |  |  | $ | 35,650 |
Bonus and stock-based compensation | 11,222 |  |  | 11,025 |
Other tax attribute carryovers | 1,601 |  |  | 1,349 |
Total deferred tax assets | 134,071 |  |  | 48,024 |
Deferred tax liabilities |  |  |
Oil and natural gas properties | 696,498 |  |  | 566,382 |
Derivative instruments | 45,728 |  |  | 105,911 |
Total deferred tax liabilities | 742,226 |  |  | 672,293 |
Total net deferred tax liability | $ | 608,155 |  |  | $ | 624,269 |
The Company generated a federal net operating tax loss of $244.4 million and accrued $9,000 of current income tax benefit for the year ended December 31, 2015. The net operating loss carryforwards consist of $333.9 million of federal net operating loss carryforwards, which expire between 2030 and 2035, and $266.5 million of state net operating loss carryforwards, which expire between 2017 and 2035. The tax benefits of carryforwards are recorded as an asset to the extent that management assesses the utilization of such carryforwards to be more likely than not. When the future utilization of some portion of the carryforwards is determined not to be more likely than not, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Management believes that the Company’s taxable temporary differences and future taxable income will more likely than not be sufficient to utilize substantially all its tax carryforwards prior to their expiration. Pursuant to authoritative guidance, the Company’s $121.2 million deferred tax asset related to net operating loss carryforwards is net of $3.6 million of unrealized excess tax benefits related to excess stock-based compensation on federal and state net operating losses of $9.6 million and $7.6 million, respectively. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2015, the Company had no unrecognized tax benefits. With respect to income taxes, the Company’s policy is to account for interest charges as interest expense and any penalties as tax expense in its Consolidated Statement of Operations. The Company files income tax returns in the U.S. federal jurisdiction and in North Dakota, Montana and Texas. The IRS has concluded an audit of the Company’s 2013 income tax return with no material change. The Company’s other income tax returns have not been audited by the IRS or any state jurisdiction. Its statute of limitation for the year ended December 31, 2015 will expire in 2019. The Company’s earliest open year in its key jurisdictions is 2012 for both the U.S. federal jurisdiction and various U.S. states, however, net operating losses originating in prior years are subject to examination when utilized. In accordance with ASU 2015-17, which the Company adopted in the fourth quarter of 2015 (see Note 2 — Summary of Significant Accounting Policies), all deferred tax assets and liabilities, along with any related valuation allowance, are classified as noncurrent on the balance sheet as of December 31, 2015. Prior periods were not retrospectively adjusted, and the current portion of the Company’s net deferred income taxes was a liability of $97.5 million at December 31, 2014, which was primarily related to derivative instruments.

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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