Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.6.0.2
Income Taxes
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The following table summarizes our provision for income taxes for the periods presented: 
 
Successor
 
 
Predecessor
 
Period From September 13, 2016
 
 
Period From January 1, 2016
 
Year Ended December 31,
 
Through December 31, 2016
 
 
Through September 12, 2016
 
2015
 
2014
Current income taxes (benefit)
 

 
 
 
 
 

 
 

Federal
$

 
 
$

 
$
(660
)
 
$
2,045

State

 
 

 
1

 
1,504

 

 
 

 
(659
)
 
3,549

Deferred income tax benefit
 

 
 
 
 
 

 
 

Federal

 
 

 
(261
)
 
(130,693
)
State

 
 

 
(4,451
)
 
(4,534
)
 

 
 

 
(4,712
)
 
(135,227
)
 
$

 
 
$

 
$
(5,371
)
 
$
(131,678
)

The following table reconciles the difference between the income tax benefit computed by applying the statutory tax rate to our loss before income taxes and our reported income tax benefit for the periods presented: 
 
Successor
 
 
Predecessor
 
Period From September 13, 2016
 
 
Period From January 1, 2016
 
Year Ended December 31,
 
Through December 31, 2016
 
 
Through September 12, 2016
 
2015
 
2014
Computed at federal statutory rate
$
(1,854
)
 
35.0
 %
 
 
$
369,111

 
35.0
 %
 
$
(555,916
)
 
35.0
 %
 
$
(189,445
)
 
35.0
 %
State income taxes, net of federal income tax benefit
197

 
(3.7
)%
 
 
1,989

 
0.2
 %
 
(4,438
)
 
0.3
 %
 
(3,556
)
 
0.6
 %
Change in valuation allowance
1,657

 
(31.3
)%
 
 
(384,692
)
 
(36.5
)%
 
554,879

 
(35.0
)%
 
61,104

 
(11.3
)%
Reorganization adjustments

 
 %
 
 
13,572

 
1.3
 %
 

 
 %
 

 
 %
Other, net

 
 %
 
 
20

 
 %
 
104

 
 %
 
219

 
 %
 
$

 
 %
 
 
$

 
 %
 
$
(5,371
)
 
0.3
 %
 
$
(131,678
)
 
24.3
 %

The following table summarizes the principal components of our deferred income tax assets and liabilities as of the dates presented: 
 
Successor
 
 
Predecessor
 
December 31,
 
2016
 
 
2015
Deferred tax assets:
 

 
 
 

Property and equipment
$
183,303

 
 
$
417,535

Pension and postretirement benefits
710

 
 
2,276

Share-based compensation
28

 
 
7,393

Net operating loss (“NOL”) carryforwards
87,622

 
 
222,971

Fair value of derivative instruments
9,579

 
 

Deferred gains

 
 
30,382

Other
7,166

 
 
16,637

 
288,408

 
 
697,194

Less:  Valuation allowance
(288,408
)
 
 
(662,909
)
Total net deferred tax assets

 
 
34,285

Deferred tax liabilities:
 
 
 
 
Fair value of derivative instruments

 
 
34,285

Total net deferred tax liabilities

 
 
34,285

Net deferred tax liabilities
$

 
 
$


As of December 31, 2016, we had federal NOL carryforwards of approximately $120.3 million, which, if not utilized, expire between 2032 and 2036, and tax-effected state NOL carryforwards of approximately $69.6 million, which expire between 2024 and 2036. Because of the change in ownership provisions of the Tax Reform Act of 1986, use of a portion of our federal and state NOL may be limited in future periods.
As of December 31, 2015, we carried a valuation allowance against our federal and state deferred tax assets of $662.9 million. We incurred a pre-tax loss in 2015 which, when aggregated with the prior two years, resulted in a pre-tax loss for the three year period ended December 31, 2015. We considered both the positive and negative evidence in determining whether it was more likely than not that some portion or all of our deferred tax assets will be realized. Due to the reorganization and subsequent emergence from bankruptcy, our NOL carryforwards were reduced under Internal Revenue Code Section 108(b), as well as a corresponding decrease in the valuation allowance of $374.5 million which resulted in an ending balance of $288.4 million as of December 31, 2016. The amount of deferred tax asset considered realizable could, however, be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.
We had no liability for unrecognized tax benefits as of December 31, 2016 and 2015. There were no interest and penalty charges recognized during the years ended December 31, 2016, 2015 and 2014. Tax years from 2012 forward remain open for examination by the Internal Revenue Service and various state jurisdictions.