Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesFor the nine months ended September 30, 2020, the Company recorded income tax benefit of $2,200 on a loss from continuing operations before income taxes of $348,946. The income tax benefit differs from the expected statutory amount primarily due to the increase in the valuation allowance, partially offset by the permanent impact of percentage depletion deductions, the impact of state income taxes, net of federal tax impact, and the recording of a discrete tax benefit related to the refundability of previously sequestered AMT Credits. The discrete income tax benefit of the previously sequestered AMT Credits is $2,123 and was recorded during the three months ended March 31, 2020. As of September 30, 2020, the Company anticipates that no current federal income tax liability will be generated in 2020. For the nine months ended September 30, 2019, the Company recorded income tax benefit of $8,880 on a loss from continuing operations before income taxes of

$20,151. The income tax benefit differs from the expected statutory amount primarily due to the permanent impact of percentage depletion and stock-based compensation deductions, partially offset by an increase in the valuation allowance.

During the nine months ended September 30, 2020, the Company recorded an increase of $92,804 to its deferred tax asset valuation allowance. The increase in the valuation allowance results from an increase in deferred tax assets for which the Company is unable to support realization. The Company currently is relying primarily on the reversal of taxable temporary differences, along with consideration of taxable income via carryback to prior years and tax planning strategies, to support the realization of deferred tax assets. For each reporting period, the Company updates its assessment regarding the realizability of its deferred tax assets, including scheduling the reversal of its deferred tax assets and liabilities, to determine the amount of valuation allowance needed. Scheduling the reversal of deferred tax asset and liability balances requires judgment and estimation. The Company believes the deferred tax liabilities relied upon as future taxable income in its assessment will reverse in the same period and jurisdiction and are of the same character as the temporary differences giving rise to the deferred tax assets that will be realized. The valuation allowance recorded represents the portion of deferred tax assets for which the Company is unable to support realization through the methods described above.

On March 27, 2020, the CARES Act was enacted into law. As a result of the CARES Act, the Company expects that AMT Credits of $68,252 will be fully refunded during the year ended December 31, 2020. As of September 30, 2020 and December 31, 2019, the Company classified the current portion of AMT Credit refunds receivable of $66,129 and $33,065, respectively, within prepaid expenses and other current assets on the Company’s Condensed Consolidated Balance Sheets.

During the three months ended September 30, 2020, the Company recorded a decrease in unrecognized tax benefits of approximately $23,800, as a result of the issuance of final regulatory guidance from the IRS. The decrease in unrecognized tax benefits did not result in an amount of cash paid for income taxes and did not impact the Company’s effective tax rate for the three and nine months ended September 30, 2020.

The IRS initiated a corporate income tax audit during the third quarter of 2020 for the Company’s 2016 tax year and related net operating loss carryback.