INCOME TAXES

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES:

The Company's effective tax rate is based on its estimated full year effective tax rate, comprised of expected statutory tax provision, offset by excess percentage depletion and other discrete tax benefits. The effective tax rate for the nine months ended September 30, 2019 was (0.3)%, composed of a tax expense of 0.2% from operations and a discrete tax benefit of (0.5)% primarily related to equity compensation. The effective tax rate for the nine months ended September 30, 2019 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion. The effective tax rate for the nine months ended September 30, 2018 was 6.0%. The effective tax rate for the nine months ended September 30, 2018 differs from the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion.

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the nine months ended September 30, 2019 and the year ended December 31, 2018, the Company did not have any unrecognized tax benefits. If accrual for interest or penalties is required, it is the Company's policy to include these as a component of income tax expense.

The Company is subject to taxation in the United States, as well as various states, and Canada, as well as various provinces. Under the provisions of the tax matters agreement entered into between the Company and its former parent on November 28, 2017 (the “TMA”), certain subsidiaries of the Company are subject to examination for tax years for the period January 1, 2015 through the nine months ended September 30, 2019 for certain state and foreign returns. Further, the Company is subject to examination for the period November 28, 2017 through the nine months ended September 30, 2019 for federal and certain state returns.