Income Taxes

6 Months Ended

Jun. 30, 2020

Note 4 - Income Taxes

The provision for income taxes for the three and six months ended June 30, 2020, and 2019, consisted of the following:


	For the Three Months Ended June 30,									For the Six Months Ended June 30,
	2020			2019			2020			2019
	(in thousands)
Current portion of income tax (expense) benefit:
Federal	$	—		$	—		$	—		$	—
State	(236)			176			(575)			(789)
Deferred portion of income tax (expense) benefit	36,921			(13,766)			136,268			33,237
Income tax (expense) benefit	$	36,685		$	(13,590)		$	135,693		$	32,448
Effective tax rate	29.1		%	21.2		%	21.3		%	20.3		%

Recorded income tax expense or benefit differs from the amounts that would be provided by applying the statutory United States federal income tax rate to income or loss before income taxes. These differences primarily relate to the effect of state income taxes, excess tax benefits and deficiencies from stock-based compensation awards, tax limitations on the compensation of covered individuals, changes in valuation allowances, and the cumulative impact of other smaller permanent differences. The quarterly rate can also be affected by the proportional impacts of forecasted net income or loss for each period presented, as reflected in the table above.

A change in the Company’s effective tax rate between reporting periods will generally reflect differences in estimating permanent differences compared to changes in forecasted net income or loss. Each quarter, the Company evaluates its deferred tax assets for potential realization, weighing both positive and negative evidence to determine, on a more likely than not basis, the future utilization by asset and jurisdiction. When the significance of negative evidence outweighs the Company’s positive support of realization, a valuation allowance is recorded. Subsequently, when the significance of positive evidence outweighs negative evidence that a deferred tax asset will be realized, the valuation allowance is released.

During the second quarter of 2020, the Company executed certain debt exchange transactions that resulted in cancellation of debt income and supported the utilization of its deferred tax assets. As a result, the Company released the valuation allowance recorded in the previous quarter which increased the Company’s income tax benefit and tax benefit rate for the three months ended June 30, 2020.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. The primary feature of the CARES Act that the Company benefited from was the acceleration of its refundable Alternative Minimum Tax (“AMT”) credits. On April 1, 2020, the Company filed an election to accelerate its remaining refundable AMT credits of $7.6 million. The Company received the refund in July 2020.

For all years before 2015, the Company is generally no longer subject to United States federal or state income tax examinations by tax authorities.