Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of components of the income tax provision (benefit)

The components of the income tax expense (benefit) for each of the periods presented below are as follows:


	Years Ended December 31,
	2020		2019		2018
	($ in millions)
Current
Federal	$	(3)	$	—	$	—
State	(6)		(26)		—
Current Income Taxes	(9)		(26)		—
Deferred
Federal	—		(297)		3
State	(10)		(8)		(13)
Deferred Income Taxes	(10)		(305)		(10)
Total	$	(19)	$	(331)	$	(10)

Schedule of effective income tax expense (benefit)

The income tax expense (benefit) reported in our consolidated statement of operations is different from the federal income tax expense (benefit) computed using the federal statutory rate for the following reasons:


	Years Ended December 31,
	2020		2019		2018
	($ in millions)
Income tax expense (benefit) at the federal statutory rate of 21%	$	(2,051)	$	(134)	$	45
State income taxes (net of federal income tax benefit)	(41)		(21)		27
Partial release of valuation allowance due to the WildHorse Merger	—		(314)		—
Change in valuation allowance excluding impact of WildHorse Merger	2,010		114		(97)
Reorganization items	41		—		—
Equity-based compensation (non-officer)	10		4		4
Officer compensation limited under Section 162(m)	9		3		5
Other	3		17		6
Total	$	(19)	$	(331)	$	(10)

Schedule of deferred tax assets and liabilities

The tax-effected temporary differences, net operating loss

(NOL) carryforwards and disallowed business interest carryforwards that comprise our deferred income taxes are as follows:


	December 31,
	2020		2019
	($ in millions)
Deferred tax liabilities:
Property, plant and equipment	$	—	$	(546)
Volumetric production payments	—		(89)
Derivative instruments	—		(14)
Other	(3)		(5)
Deferred tax liabilities	(3)		(654)

Deferred tax assets:
Property, plant and equipment	907		—
Net operating loss carryforwards	2,066		1,971
Carrying value of debt	48		169
Disallowed business interest carryforward	293		25
Asset retirement obligations	34		50
Investments	71		83
Accrued liabilities	288		64
Derivative instruments	53		—
Other	51		87
Deferred tax assets	3,811		2,449
Valuation allowance	(3,808)		(1,805)
Deferred tax assets after valuation allowance	3		644
Net deferred tax liability	$	—	$	(10)

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:


	2020		2019		2018
	($ in millions)
Unrecognized tax benefits at beginning of period	$	74	$	79	$	106
Additions based on tax positions related to the current year	—		—		—
Additions to tax positions of prior years	—		27		—
Settlements	—		(32)		—
Expiration of the applicable statute of limitations	—		—		(23)
Reductions to tax positions of prior years	—		—		(4)
Unrecognized tax benefits at end of period	$	74	$	74	$	79