Income Taxes (Tables)

8 Months Ended

12 Months Ended

Dec. 31, 2012

Dec. 31, 2012

Linn Energy, LLC [Member]

Operating Loss Carryforwards [Line Items]

Components of income tax expense (benefit)

The Company is a limited liability company that has elected to be treated as a corporation for U.S. federal income tax purposes. Income tax expense consisted of the following:

	April 30, 2012 (Inception) To December 31, 2012
	(in thousands)
Deferred taxes:
Federal	$	11,867
State	661
	$	12,528

Certain of the Company’s subsidiaries are Subchapter C-corporations subject to federal and state income taxes. Income tax expense (benefit) consisted of the following:

	Year Ended December 31,
	2012			2011			2010
	(in thousands)
Current taxes:
Federal	$	2,711		$	4,551		$	65
State	439			605			1,088
Deferred taxes:
Federal	323			(1,148		)	2,862
State	(683		)	1,458			226
	$	2,790		$	5,466		$	4,241

Effective income tax rate reconciliation

A reconciliation of the federal statutory tax rate to the effective tax rate is as follows:

	April 30, 2012 (Inception) To December 31, 2012
Federal statutory rate	35.0	%
State, net of federal tax benefit	2.0
Other items	0.8
Effective rate	37.8	%

A reconciliation of the federal statutory tax rate to the effective tax rate is as follows:

	Year Ended December 31,
	2012		2011		2010
Federal statutory rate	35.0	%	35.0	%	35.0	%
State, net of federal tax benefit	0.1		0.5		(1.2	)
Loss excluded from nontaxable entities	(35.6	)	(34.4	)	(37.5	)
Other items	(0.2	)	0.1		(0.1	)
Effective rate	(0.7	)%	1.2	%	(3.8	)%

Significant components of the deferred tax assets and liabilities

Significant components of the deferred tax assets and liabilities were as follows:

	December 31, 2012
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	622
Unamortized intangible drilling costs	9,029
Total deferred tax assets	9,651
Deferred tax liabilities:
Investment in LINN Energy	(23,210		)
Total deferred tax liabilities	(23,210		)
Net deferred tax liabilities	$	(13,559	)

Significant components of the deferred tax assets and liabilities were as follows:

	December 31,
	2012			2011
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	—		$	159
Unit-based compensation	10,579			9,146
Other	4,924			3,606
Total deferred tax assets	15,503			12,911
Deferred tax liabilities:
Property and equipment principally due to differences in depreciation	(11,049		)	(8,226		)
Other	(1,055		)	(1,646		)
Total deferred tax liabilities	(12,104		)	(9,872		)
Net deferred tax assets	$	3,399		$	3,039

Classification of net deferred tax assets and liabilities in consolidated balance sheets

Net deferred tax assets and liabilities were classified on the consolidated balance sheets as follows:

	December 31,
	2012			2011
	(in thousands)
Deferred tax assets	$	10,318		$	8,279
Deferred tax liabilities	(612		)	(589		)
Other current assets	$	9,706		$	7,690
Deferred tax assets	$	5,186		$	4,632
Deferred tax liabilities	(11,493		)	(9,283		)
Other noncurrent liabilities	$	(6,307	)	$	(4,651	)

Classification of net deferred tax assets and liabilities in balance sheets

Net deferred tax assets and liabilities were classified on the balance sheet as follows:

	December 31, 2012
	(in thousands)
Noncurrent deferred tax assets	$	9,651
Noncurrent deferred tax liabilities	(23,210		)
Net noncurrent deferred tax liabilities	$	(13,559	)