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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Note 18—Income Taxes We have approximately $1.6 billion in net operating loss carryforwards (“NOL carryforwards”); however, we currently have a valuation allowance against this and substantially all of our other deferred taxed assets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future results of operations, and tax planning strategies in making this assessment. Based upon the level of historical taxable income, significant book losses during the prior periods, and projections for future results of operations over the periods in which the deferred tax assets are deductible, among other factors, management concluded that we did not meet the “more likely than not” requirement in order to recognize deferred tax assets and therefore, a valuation allowance has been recorded for substantially all of our net deferred tax assets at December 31, 2017 and 2016. In connection with our emergence from bankruptcy on August 31, 2012, we experienced an ownership change as defined under Section 382 of the Code. Section 382 generally places a limit on the amount of NOL carryforwards and other tax attributes arising before an ownership change that may be used to offset taxable income after an ownership change. We believe that we have qualified for an exception to the general limitation rules. This exception under Code Section 382(l)(5) provides for substantially less restrictive limitations on our NOL carryforwards; however, the NOL carryforwards would have been eliminated if we had experienced another ownership change within the two year period following our Bankruptcy. Our amended and restated certificate of incorporation places restrictions upon the ability of certain equity interest holders to transfer their ownership interest in us. These restrictions are designed to provide us with the maximum assurance that another ownership change does not occur that could adversely impact our NOL carryforwards. During the years ended December 31, 2017, 2016, and 2015, no adjustments were recognized for uncertain tax benefits. Our net taxable income must be apportioned to various states based upon the income tax laws of the states in which we derive our revenue. Our NOL carryforwards will not always be available to offset taxable income apportioned to the various states. On December 22, 2017, the Tax Cuts and Jobs Act (“U.S. tax reform”) was signed into law. U.S. tax reform lowered the Federal corporate tax rate from 35% to 21% and made numerous other tax law changes. GAAP requires companies to recognize the effect of tax law changes in the period of enactment. As a result of the change in rate, we remeasured our net deferred tax assets and the associated valuation allowance by $207.7 million. We also released $0.8 million of valuation allowance related to Alternative Minimum Tax ("AMT") credit carried forward from prior years that became refundable in connection with the U.S. tax reform. The current year AMT credit of $0.8 million was also recorded as a long-term receivable rather than a deferred tax asset. During 2016, we recorded a benefit for the release of $8.6 million of our valuation allowance to offset future temporary differences associated with the 5.00% Convertible Senior Notes. During 2015, we recorded a benefit for the release of $16.8 million of our valuation allowance as we expect to be able to utilize a portion of our NOL carryforwards to offset future taxable income of Mid Pac. During 2018 and thereafter, we will continue to assess the realizability of our deferred tax assets based on consideration of actual and projected operating results and tax planning strategies. Should actual operating results improve, the amount of the deferred tax asset considered more likely than not to be realizable could be increased. Income (loss) before income taxes related to our foreign operations was a loss of $1.4 million, and $0.9 million for the years ended December 31, 2016 and 2015, respectively. We had no income (loss) from foreign operations for the year ended December 31, 2017. Income tax expense (benefit) consisted of the following (in thousands):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |  |  |
U.S.—Federal | $ | — |  |  | $ | — |  |  | $ | — |
U.S.—State | 2 |  |  | 23 |  |  | — |
Foreign | — |  |  | — |  |  | (299 | )
Deferred: |  |  |  |  |  |  |
U.S.—Federal | (1,321 | ) |  | (7,046 | ) |  | (14,685 | )
U.S.—State | — |  |  | (889 | ) |  | (1,804 | )
Foreign | — |  |  | — |  |  | — |
Total | $ | (1,319 | ) |  | $ | (7,912 | ) |  | $ | (16,788 | )
Income tax expense was different from the amounts computed by applying U.S. Federal income tax rate of 35% to pretax income as a result of the following:
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit | — | % |  | 1.6 | % |  | 3.2 | %
Expiration of capital loss carryover | — | % |  | (17.6 | )% |  | (25.5 | )%
Change in valuation allowance related to current activity | (30.1 | )% |  | 9.2 | % |  | 25.3 | %
Change in valuation allowance related to change in tax rate | (291.2 | )% |  | — | % |  | — | %
Change in tax rate | 291.2 | % |  | — | % |  | — | %
Permanent items | 1.1 | % |  | (5.7 | )% |  | (7.6 | )%
Provision to return adjustments and other | (7.9 | )% |  | (7.8 | )% |  | (0.8 | )%
Actual income tax rate | (1.9 | )% |  | 14.7 | % |  | 29.6 | %
Deferred tax assets (liabilities) are comprised of the following (in thousands):
| December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Net operating loss | $ | 388,317 |  |  | $ | 611,631 |
Property and equipment | 9,862 |  |  | 23,203 |
Other | 10,263 |  |  | 10,868 |
Total deferred tax assets | 408,442 |  |  | 645,702 |
Valuation allowance | (383,253 | ) |  | (613,866 | )
Net deferred tax assets | 25,189 |  |  | 31,836 |
Deferred tax liabilities: |  |  |
Investment in Laramie Energy | 18,140 |  |  | 20,600 |
Convertible notes | 3,193 |  |  | 6,866 |
Intangible assets | 3,978 |  |  | 2,671 |
Other | 863 |  |  | 2,337 |
Total deferred tax liabilities | 26,174 |  |  | 32,474 |
Total deferred tax liability, net | $ | (985 | ) |  | $ | (638 | )
We have NOL carryforwards as of December 31, 2017 of $1.6 billion for federal income tax purposes. If not utilized, the NOL carryforwards will expire during 2027 through 2036. As noted above, we also have AMT Credit Carryovers of $1.6 million which are refundable under the U.S. tax reform legislation effective tax year 2018. During 2016, we amended our federal income tax returns for 2012, 2013, and 2014 to properly reflect amortization deductions with respect to certain development costs related to our investment in Laramie Energy that should have been claimed in those years. The impact of the corrected returns was an increase to the deferred tax asset related to our net operating loss and a corresponding decrease in the deferred tax asset related to our investment in Laramie Energy of approximately $59 million.

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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