Income Taxes (Notes)

9 Months Ended

Sep. 30, 2018

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

As of September 30, 2018, the Company had a net deferred tax asset of $49.2 million compared to $1.0 million as of December 31, 2017. Commensurate to the merger of Hawaiian Telcom, net deferred tax assets of $44.3 million were recorded. The main components of the net deferred tax asset from the merger included $41.4 million of deferred tax liabilities related to fixed assets, $11.7 million of deferred tax assets related to pension and postretirement benefits, and $62.2 million of net operating tax loss carryforwards. Prior to the merger, Hawaiian Telcom had a full valuation allowance against all of their deferred tax assets. Deferred tax balances were re-established in the opening balance sheet as the deferred taxes recorded at the time of the merger are considered more likely than not to be utilized.

As of September 30, 2018, the Company had U.S. federal net operating loss carryforwards of $590.1 million with a deferred tax asset value of $123.9 million. U.S. tax laws limit annual utilization of tax loss carryforwards of acquired entities and losses generated in years prior to 2018. Approximately $130 million of the remaining federal tax loss carryforwards will expire in 2023. Tax law limitations should not materially impact utilization of the loss carryforwards.