Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

(7)  Income Taxes

Income tax expense consisted of the following:

	Year Ended December 31,
(in thousands)	2022		2023		2024
Current income tax benefit	$	—		(6,377)		—
Deferred income tax expense		117,494		134,664		147,729
Total income tax expense	$	117,494		128,287		147,729

Income tax expense differs from the amount that would be computed by applying the U.S. statutory federal income tax rate of 21% to income before taxes as a result of the following:

	Year Ended December 31,
(in thousands)	2022		2023		2024
Federal income tax expense	$	93,185		105,015		115,210
State income tax expense, net of federal effect		20,891		18,740		26,520
Equity-based compensation		1,027		4,086		4,597
Charitable contributions		—		—		2,576
Change in valuation allowance		2,582		5		(2,350)
Other		(191)		441		1,176
Total income tax expense	$	117,494		128,287		147,729

Deferred income taxes reflect the impact of temporary differences between assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The tax effect of the temporary differences giving rise to net deferred income tax assets and liabilities is as follows:

	December 31,
(in thousands)	2023		2024
Deferred income tax assets:
NOL carryforwards	$	115,284		117,854
Equity-based compensation		2,864		3,359
Charitable contributions		2,587		237
Total deferred income tax assets		120,735		121,450
Valuation allowance		(2,587)		(237)
Deferred income tax assets, net		118,148		121,213
Deferred income tax liability:
Investment in Antero Midstream Partners		384,027		534,821
Total deferred income tax liability		384,027		534,821
Deferred income tax liability, net	$	(265,879)		(413,608)

In assessing the realizability of the deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will be realized based on a more-likely-than-not standard of judgment. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the Company’s temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon the projections of future taxable income over the periods in which the deferred income tax assets are deductible, management believed that the Company will not realize the benefits of certain of these deductible differences related to charitable contributions. As such, as of December 31, 2023 and 2024, the Company has recorded a full valuation allowance for its charitable contributions.

The calculation of the Company’s tax assets and liabilities involves uncertainties in the application of complex tax laws and regulations. The Company gives financial statement recognition to those tax positions that it believes are more-likely-than-not to be sustained upon examination by the IRS or state revenue authorities. As of December 31, 2023 and 2024, the Company did not have any uncertain tax positions.

As of December 31, 2024, the Company has U.S. federal and state NOL carryforwards before the effect of income taxes of $438 million and $505 million, respectively, which have no expiration date. Tax years 2021 through 2024 remain open to examination by the IRS. The Company and its subsidiaries file tax returns with various state taxing authorities and those returns remain open to examination for tax years 2020 through 2024.