Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

(5)Income Taxes

Our income tax benefit was $9.7 million for the year ended December 31, 2021 compared to $25.6 million in 2020 and $500.3 million in 2019. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:

	Year Ended December 31,
	2021			2020			2019
Federal statutory tax rate		21.0	%		21.0	%		21.0	%
State, net of federal benefit		4.0			5.2			3.8
State rate and law change		(3.4	)		4.3			1.8
Valuation allowances		(24.8	)		(26.3	)		(3.8	)
Non-deductible equity compensation		0.8			(0.7	)		(0.2	)
Consolidated effective tax rate		(2.4	%)		3.5	%		22.6	%

Income tax expense (benefit) attributable to income (loss) before income taxes consists of the following (in thousands):

	2021								2020									2019
	Current		Deferred			Total			Current			Deferred			Total			Current		Deferred			Total
U.S. federal	$	—	$	6,297		$	6,297		$	(366	)	$	(24,489	)	$	(24,855	)	$	—	$	(434,585	)	$	(434,585	)
U.S. state and local		7,984		(24,024	)		(16,040	)		(157	)		(540	)		(697	)		6,147		(71,853	)		(65,706	)
Total	$	7,984	$	(17,727	)	$	(9,743	)	$	(523	)	$	(25,029	)	$	(25,552	)	$	6,147	$	(506,438	)	$	(500,291	)

Significant components of deferred tax assets and liabilities are as follows:

	December 31,
	2021			2020
	(in thousands)
Deferred tax assets:
Net operating loss carryforward	$	788,375		$	879,339
Divestiture contract obligation		112,199			132,352
Deferred compensation		22,121			16,635
Equity compensation		4,833			5,445
Asset retirement obligations		21,734			18,923
Interest expense carryforward		53,876			15,757
Lease right-of-use assets		9,954			16,070
Cumulative mark-to-market loss		32,221			2,607
Other		12,181			12,082
Valuation allowances:
Federal		(67,984	)		(152,499	)
State, net of federal benefit		(203,085	)		(226,520	)
Total deferred tax assets		786,425			720,191
Deferred tax liabilities:
Depreciation and depletion		(879,163	)		(835,506	)
Operating lease liabilities		(9,247	)		(15,058	)
Other		(15,657	)		(4,894	)
Total deferred tax liabilities		(904,067	)		(855,458	)
Net deferred tax liability	$	(117,642	)	$	(135,267	)

At December 31, 2021, deferred tax liabilities exceeded deferred tax assets by $117.6 million. As of December 31, 2021, we have a state valuation allowance of $203.1 million related to state tax attributes in Louisiana, Oklahoma, Pennsylvania, Texas and West Virginia. As of December 31, 2021, we have federal valuation allowances of $68.0 million primarily related to our federal net operating loss carryforward (“NOL”), and federal basis differences. The net change in our deferred tax asset valuation allowances was a reduction of $108.0 million for the year ended December 31, 2021 compared to an increase in our valuation allowances of $188.2 million in 2020 and an increase of $70.5 million in 2019.

At December 31, 2021, we had federal NOL carryforwards of $2.9 billion. This includes $1.2 billion that expires between 2030 and 2037 and also includes $1.7 billion of NOL carryforwards generated after 2017 that do not expire. We have state NOL carryforwards in Pennsylvania of $861.0 million that expire between 2028 and 2040 and in Louisiana, we have state NOL carryforwards of $1.5 billion that do not expire. We file consolidated tax returns in the United States federal jurisdiction. We file separate company state income tax returns in Louisiana and Pennsylvania and file consolidated or unitary state income tax returns in Oklahoma, Texas and West Virginia. We are subject to U.S. federal income tax examinations for the years 2018 and after and we are subject to various state tax examinations for years 2017 and after. We have not extended the statute of limitation period in any income tax jurisdiction. Our policy is to recognize interest related to income tax expense in interest expense and penalties in general and administrative expense. We do not have any accrued interest or penalties related to tax amounts as of December 31, 2021. Throughout 2021, 2020 and 2019, our unrecognized tax benefits were not material.