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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

(Benefit) Provision for Income Taxes

The Company’s income tax benefit consisted of the following components for the years ended December 31 (in thousands):

	Year Ended December 31,
	2012				2011				2010
Current
Federal	$	(72	)		$	618			$	(732	)
State	(2		)		551				1,552
	(74		)		1,169				820
Deferred
Federal	(97,410		)		(6,447		)		(434,117		)
State	(2,878		)		(539		)		(13,383		)
	(100,288		)		(6,986		)		(447,500		)
Total benefit	(100,362		)		(5,817		)		(446,680		)
Less: income tax provision attributable to noncontrolling interest	304				109				115
Total benefit attributable to SandRidge Energy, Inc.	$	(100,666	)		$	(5,926	)		$	(446,795	)

Reconciliation of Provision (Benefit) for Income Taxes at Statutory Federal Tax Rate

A reconciliation of the provision (benefit) for income taxes at the statutory federal tax rate to the Company’s actual income tax benefit is as follows for the years ended December 31 (in thousands):

	2012				2011				2010
Computed at federal statutory rate	$	51,173			$	54,800			$	(88,085	)
State taxes, net of federal benefit	8,913				5,231				1,659
Non-deductible expenses	7,247				6,394				5,507
Stock-based compensation	7,172				8,229				9,940
Net effects of consolidating the non-controlling interests’ tax provisions	(37,047		)		(19,120		)		(1,556		)
Bargain purchase gain	(42,944		)		—				—
Impairment of non-deductible goodwill	71,885				—				—
Other	(348		)		(4,539		)		3,576
Change in valuation allowance	(66,429		)		(51,631		)		69,664
Valuation allowance release	(100,288		)		(5,290		)		(447,500		)
Total income tax benefit	$	(100,666	)		$	(5,926	)		$	(446,795	)

Deferred Tax Assets and Liabilities

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

	December 31,
	2012				2011
Deferred tax liabilities
Investments(1)	$	334,331			$	233,819
Property, plant and equipment	198,424				—
Derivative contracts	24,819				—
Total deferred tax liabilities	557,574				233,819
Deferred tax assets
Property, plant and equipment	—				289,148
Derivative contracts	—				39,268
Allowance for doubtful accounts	17,713				11,725
Net operating loss carryforwards	859,328				556,768
Litigation settlement	7,200				—
Compensation and benefits	13,935				14,053
Alternative minimum tax credits and other carryforwards	42,242				39,979
Asset retirement obligations	172,229				45,762
Other	2,193				2,721
Total deferred tax assets	1,114,840				999,424
Valuation allowance	(557,266		)		(765,605		)
Net deferred tax liability	$	—			$	—

____________________

(1) Includes the Company’s deferred tax liability resulting from its investment in the Royalty Trusts. See Note 4 for further discussion of the Royalty Trusts.

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319

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