Income Taxes

In December 2017, the Tax Cuts and Jobs Act was signed into law. The legislation contained several key changes to U.S. corporate tax laws, including a reduction of the corporate income tax rate from 35% to 21%, effective January 1, 2018. The legislation also included a variety of other changes such as the repeal of the alternative minimum tax; the introduction of new limitations on the tax deductibility of net operating losses, interest expenses, and executive compensation expenses; the acceleration of expensing of certain qualified property; and the introduction of new laws governing taxation of foreign earnings of U.S. entities, among others.

The Company recognizes the effect of tax law changes in the reporting period that includes the enactment date in accordance with U.S. GAAP. As a result, the Company remeasured its deferred tax assets and liabilities as of December 31, 2017 to reflect the reduction in the corporate tax rate from 35% to 21% enacted into law in December 2017. This remeasurement resulted in a $713.7 million decrease in net deferred income tax liabilities and corresponding decrease in income tax expense as of and for the year ended December 31, 2017, which is reflected in the tables below. The Company's accounting for the effects of the tax rate change on its deferred tax balances as well as other relevant aspects of the Tax Cuts and Jobs Act was completed as of December 31, 2017 and no provisional amounts were recorded at that date that were later adjusted in 2018.

The items comprising the Company's (provision) benefit for income taxes are as follows for the periods presented:



	Year ended December 31,
In thousands	2018			2017			2016
Current income tax (provision) benefit:
United States federal (1)	$	7,781		$	7,781		$	22,941
Various states	(5		)	—			(2		)
Total current income tax benefit	7,776			7,781			22,939
Deferred income tax (provision) benefit:
United States federal - taxation on operations	(282,947		)	(81,054		)	182,422
United States federal - effect of US tax reform	—			713,655			—
Various states	(31,931		)	(7,002		)	27,414
Total deferred income tax (provision) benefit	(314,878		)	625,599			209,836
(Provision) benefit for income taxes	$	(307,102	)	$	633,380		$	232,775

(1) The current federal income tax benefits represent alternative minimum tax refunds.

The (provision) benefit for income taxes differs from the amount computed by applying the United States statutory federal income tax rate to income (loss) before income taxes. The sources and tax effects of the difference are as follows:



	Year ended December 31,
	2018					2017					2016
In thousands, except rates	Amount			Rate		Amount			Rate		Amount			Rate

Expected income tax (provision) benefit based on US statutory tax rate	$	(272,328	)	21.0	%	$	(54,623	)	35.0	%	$	221,359		35.0	%
State income taxes, net of federal benefit	(45,920		)	3.6	%	(4,682		)	3.0	%	18,829			3.0	%
Effect of US tax reform legislation	—			—	%	713,655			(457.3	%)	—			—	%
Tax (benefit) deficiency from stock-based compensation	259			—	%	(3,932		)	2.5	%	—			—	%
Non-deductible compensation	(2,932		)	0.2	%	(13,813		)	8.9	%	(3,471		)	(0.5	%)
Other, net	13,819			(1.1	%)	(3,225		)	2.1	%	(3,942		)	(0.7	%)
(Provision) benefit for income taxes	$	(307,102	)	23.7	%	$	633,380		(405.8	%)	$	232,775		36.8	%

The components of the Company’s deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 are reflected in the table below.



	December 31,
In thousands	2018			2017
Deferred tax assets
United States net operating loss carryforwards	$	549,166		$	604,423
Canadian net operating loss carryforwards	19,633			19,341
Alternative minimum tax carryforwards	—			7,781
Equity compensation	13,122			12,962
Other	13,622			21,885
Total deferred tax assets	595,543			666,392
Canadian valuation allowance	(19,633		)	(19,341		)
Total deferred tax assets, net of valuation allowance	575,910			647,051
Deferred tax liabilities
Property and equipment	(2,144,767		)	(1,903,451		)
Other	(5,579		)	(3,158		)
Total deferred tax liabilities	(2,150,346		)	(1,906,609		)
Deferred income tax liabilities, net	$	(1,574,436	)	$	(1,259,558	)

As of December 31, 2018, the Company had federal and state net operating loss carryforwards of $1.95 billion and $3.17 billion, respectively. The federal net operating loss carryforward will begin expiring in 2035. The Company’s net operating loss carryforward in Oklahoma totaled $2.14 billion at December 31, 2018, which will begin to expire in 2028. The Company’s net operating loss carryforward in North Dakota totaled $898 million at December 31, 2018, which will begin to expire in 2035. Any available statutory depletion carryforwards will be recognized when realized. The Company files income tax returns in the U.S. federal, U.S. state and Canadian jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years prior to 2015.

The Company recorded valuation allowances of $0.3 million, $0.4 million, and $1.0 million against Canadian deferred tax assets for the years ended December 31, 2018, 2017, and 2016, respectively. The Company's cumulative valuation allowance was $19.6 million as of December 31, 2018. Our Canadian subsidiary has generated operating loss carryforwards for which we do not believe we will realize a benefit. The amount of deferred tax assets considered realizable could change if our subsidiary generates taxable income.