Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

(6) Income Taxes

Our income tax benefit was $25.6 million for the year ended December 31, 2020 compared to $500.3 million in 2019 and $30.5 million in 2018. Reconciliation between the statutory federal income tax rate and our effective income tax rate is as follows:

	Year Ended December 31,
	2020		2019			2018
Federal statutory tax rate	21.0	%		21.0	%		21.0	%
State, net of federal benefit	5.2			3.8			(0.3	)
State rate and law change	4.3			1.8			0.9
Valuation allowances	(26.3	)		(3.8	)		(0.4	)
Non-deductible equity compensation	(0.7	)		(0.2	)		(0.1	)
Goodwill impairment	—			—			(19.4	)
Consolidated effective tax rate	3.5	%		22.6	%		1.7	%

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

		2020									2019										2018
		Current		Deferred			Total			Current		Deferred			Total				Current					Deferred			Total
U.S. federal	$	(366	)	$	(24,489	)	$	(24,855	)	$	—	$	(434,585	)		$	(434,585	)		$		—	$		(25,322	)	$	(25,322	)
U.S. state and local		(157	)		(540	)		(697	)		6,147		(71,853	)			(65,706	)				—			(5,167	)		(5,167	)
Total	$	(523	)	$	(25,029	)	$	(25,552	)	$	6,147	$	(506,438	)		$	(500,291	)		$		—	$		(30,489	)	$	(30,489	)

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

	December 31,
	2020			2019
	(in thousands)
Deferred tax assets:
Net operating loss carryforward	$	879,339		$	581,324
Divestiture contract obligation		132,352			—
Deferred compensation		16,635			16,815
Equity compensation		5,445			7,188
Asset retirement obligation		18,923			60,064
Interest expense carryover		15,757			18,035
Lease deferred tax assets		16,070			16,450
Cumulative mark-to-market loss		2,607			—
Other		12,082			11,072
Valuation allowances:
Federal		(152,499	)		(32,530	)
State, net of federal benefit		(226,520	)		(158,296	)
Total deferred tax assets		720,191			520,122
Deferred tax liabilities:
Depreciation and depletion		(839,869	)		(639,581	)
Cumulative mark-to-market gain		—			(25,957	)
Lease deferred tax liabilities		(15,058	)		(14,780	)
Other		(531	)		—
Total deferred tax liabilities		(855,458	)		(680,318	)
Net deferred tax liability	$	(135,267	)	$	(160,196	)

At December 31, 2020, deferred tax liabilities exceeded deferred tax assets by $135.3 million. As of December 31, 2020, we have a state valuation allowance of $226.5 million related to state tax attributes in Louisiana, Oklahoma, Pennsylvania, Texas and

West Virginia. As of December 31, 2020, we have federal valuation allowances of $152.5 million primarily related to our federal net operating loss carryforward (“NOL”), federal basis differences and charitable contribution carryforward. See the table below for activity related to these valuation allowances.

The changes in our deferred tax asset valuation allowances are as follows (in thousands):

		2020			2019			2018
Balance at the beginning of the year	$	(190,826	)	$	(120,347	)	$	(125,134	)
Charged to provision for income taxes:
State net operating loss carryforwards		(56,903	)		(25,710	)		(23,926	)
Federal net operating loss carryforwards		(113,988	)		13,780			11,716
Non-recoverable deferred tax assets		(7,433	)		(28,208	)		—
Other state valuation allowances		(11,321	)		(31,214	)		16,380
Other federal valuation allowances		244			346			494
Other		1,208			527			123
Balance at the end of the year	$	(379,019	)	$	(190,826	)	$	(120,347	)

At December 31, 2020, we had federal NOL carryforwards of $3.2 billion. This includes $1.4 billion that expires between 2021 and 2038 and also includes $1.8 billion of NOL carryforwards generated after 2017 that do not expire. We have state NOL carryforwards in Pennsylvania of $935.0 million that expire between 2027 and 2040 and in Louisiana, we have state NOL carryforwards of $1.4 billion that expire between 2034 and 2040. 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 2017 and after and we are subject to various state tax examinations for years 2016 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, 2020. Throughout 2020 and 2019, our unrecognized tax benefits were not material.