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Income Taxes | 6 Months Ended
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Jun. 30, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Company’s income tax provision of $4.7 million for the Successor period April 2 through June 30, 2017 included a tax provision of $0.1 million related to the remeasurement of foreign income tax accounts. The Company recorded an income tax benefit of $266.0 million for the Predecessor period April 1, 2017. The Company’s income tax benefit for the three months ended June 30, 2016 was $37.6 million, which included a tax benefit of $5.3 million related to the remeasurement of foreign income tax accounts. The Company’s income tax benefit of $263.8 million for the Predecessor period January 1 through April 1, 2017 included a tax provision of $9.4 million related to the remeasurement of foreign income tax accounts and was calculated utilizing a discrete period method. The Company’s income tax benefit of $97.4 million for the six months ended June 30, 2016 included a tax provision of $2.4 million related to the remeasurement of foreign income tax accounts. The Company’s effective tax rates for the Predecessor period January 1 through April 1, 2017 and the Successor period April 2 through June 30, 2017 are comprised of the expected statutory tax expense offset by foreign rate differential and changes in valuation allowance. As described in Note 3. "Emergence from the Chapter 11 Cases and Fresh Start Reporting," the Plan provided that the Company’s pre-petition equity and certain obligations were cancelled and extinguished and a significant portion of its long-term debt was discharged in exchange for new common stock and other consideration. Generally, absent an exception, for US tax purposes a debtor recognizes cancellation of debt income (CODI) upon discharge of its outstanding indebtedness for an amount of consideration less than the adjusted issue price of such indebtedness. The Company excluded CODI with respect to the plan of reorganization from its taxable income in accordance with US Internal Revenue Code (IRC) Section 108, which allows a taxpayer that is a debtor in a reorganization case to exclude CODI from taxable income if the discharge is granted by a bankruptcy court or pursuant to a plan of reorganization approved by a bankruptcy court. However, in such event, Section 108 requires a reduction in certain income tax attributes otherwise available to the taxpayer, in most cases by the amount of such CODI. Generally, the amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued, and (iii) the fair market value of any consideration, including equity, issued to the creditors. The actual reduction in tax attributes does not occur until the first day of the Company’s taxable year subsequent to the date of emergence, or January 1, 2018. The Company estimates that it will be able to retain approximately $4 billion of gross US federal net operating losses (NOLs), $100 million of general business credits, $30 million of alternative minimum tax (AMT) credits, and $270 million of foreign tax credits (FTCs) after giving effect to such required reductions. In connection with the Company’s emergence from bankruptcy, the Company experienced an “ownership change” as defined in US IRC Section 382. As a result, the Company’s ability to use pre-ownership change NOLs, general business credits, AMT credits, FTCs and other tax attributes to offset future taxable income or taxes owed is limited. Under US IRC Section 382 and Section 383, an entity that experiences an ownership change in bankruptcy generally is subject to an annual limitation (the Annual Limitation) on its use of its pre-ownership change NOLs and other tax attributes after the ownership change equal to the equity value of the entity immediately after implementation of the plan of reorganization (reflecting the increase, if any, in value resulting from the surrender or cancellation of any claims against the Company thereunder), multiplied by the long-term tax exempt rate posted by the Internal Revenue Service, subject to certain adjustments. A significant portion of the Company’s retained NOLs (stated above) are not subject to the Annual Limitation because they are deemed attributable to the period after the ownership change. The Company also had a net unrealized built-in gain at the time of the ownership change; therefore, certain built-in gains recognized within five years after the ownership change will increase the Annual Limitation for the five-year recognition period beginning April 3, 2017 through April 2, 2022. There is significant uncertainty surrounding which assets with built-in gains will be realized within this period which otherwise would allow the Company to realize the incremental NOLs and other attributes in excess of the Annual Limitation. The estimated Annual Limitation will not prevent the usage of NOLs, provided there is sufficient income in the carryforward period. The Company maintains a full valuation allowance against its US net deferred tax assets. The Company has reduced the deferred tax assets and corresponding valuation allowance related to general business credits and FTCs as a result of the Annual Limitation.

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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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