XML 22 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Income Taxes
9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesFor the three and nine months ended September 30, 2020, the Company utilized a discrete period method to calculate taxes, as it does not believe that the annual effective tax rate method represents a reliable estimate given the current uncertainty surrounding COVID-19 and its impact on the Company's annual guidance. For the three and nine months ended September 30, 2020, the Company had an income tax benefit of $8.2 million and $9.3 million, respectively. The income tax benefit of $9.3 million is due to a $3.3 million income tax benefit from the Internal Revenue Code ("IRC") Section 45I Marginal Well Credit and other discrete items, a $3.2 million income tax benefit from depletion expense and a $2.9 million income tax benefit from the loss recognized before income taxes. The Marginal Well Credit is a production-based tax credit that provides a credit for qualified natural gas production. The credit is phased out when natural gas prices exceed certain levels. The Company had income tax expense of $7.6 million and $68.6 million for the three and nine months ended September 30, 2019, respectively. On March 27, 2020, the President of the United States signed and enacted into law the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). The CARES Act, among other things, provides temporary relief from certain aspects of the Tax Cuts and Jobs Act of 2017 that had imposed limitations on the utilization of certain losses, interest expense deductions and alternative minimum tax ("AMT") credits. The CARES Act also provides opportunities for businesses to improve their cash flows by obtaining refunds for prior taxable years and reducing their income and deferring payroll tax liabilities for the current taxable year. Specifically, Section 2305 of the CARES Act accelerates the ability to receive refunds of remaining AMT credits for tax years 2019, 2020 and 2021. As a result, in the first quarter of 2020, the Company recorded an adjustment of approximately $11.3 million to reclassify AMT credits from a non-current income tax receivable to a current income tax receivable. During the third quarter of 2020, the Company received approximately $24.3 million for refunds of AMT credits. The Company is continuing to evaluate the impact of the CARES Act on its business, financial results and disclosures.