6.	Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31 are as follows:

	2017			2016
Deferred tax assets:
Employee benefits	$	836		$	1,349
Inventories		2,309			8,811
Natural gas derivatives		610			1,281
Goodwill & other intangibles		3,179			4,881
Net operating loss		59,536			51,722
Foreign tax credits		667			—
Other		2,029			2,028
Total deferred tax assets		69,166			70,072
Deferred tax liabilities:
Depreciation		14,332			71,308
Indefinite-lived intangibles		209			—
Foreign		26			—
Total deferred tax liabilities		14,567			71,308
Valuation Allowance		54,829			—
Net deferred tax liabilities	$	(230	)	$	(1,236	)

Significant components of the provision for income taxes for the years ended December 31 are as follows:

	2017			2016			2015
Current:
Federal	$	(375	)	$	(495	)	$	1,509
State		(99	)		(496	)		120
Foreign		581			445			966
Total current		107			(546	)		2,595
Deferred		(2,134	)		(50,535	)		(56,800	)
	$	(2,027	)	$	(51,081	)	$	(54,205	)

The reconciliation of income taxes computed at the U.S. statutory tax rate to the Company’s income tax expense for the years ended December 31 is as follows:

	2017						2016						2015
	Amount			Percent			Amount			Percent			Amount			Percent
U.S. statutory rate	$	(89,300	)		(35.0	)%	$	(45,923	)		(35.0	)%	$	(57,312	)		(35.0	)%
State income taxes, net of federal tax benefit		(5,684	)		(2.2	)		(3,283	)		(2.5	)		(3,474	)		(2.1	)
Mining depletion		(619	)		(0.2	)		(378	)		(0.3	)		(1,557	)		(0.9	)
Change in election for foreign tax credits		(667	)		(0.3	)		(2,753	)		(2.1	)		1,442			0.9
Foreign tax assets valuation allowance		—			—			—			—			1,230			0.7
Foreign investments		8,569			3.4			(323	)		(0.2	)		847			0.5
Stock compensation excess tax deficiency		876			0.3			789			0.6			—			—
Other permanent differences		1,806			0.7			790			0.6			4,619			2.8
Tax reform deferred rate change		28,163			11.0			—			—			—			—
Valuation allowance		54,829			21.5			—			—			—			—
	$	(2,027	)		(0.8	)%	$	(51,081	)		(38.9	)%	$	(54,205	)		(33.1	)%

As a result of the significant decline in oil and gas activities and net losses incurred over the past several quarters, the Company determined during the year ending December 31, 2017 that it was more likely than not that a portion of our deferred tax assets will not be realized in the future. Accordingly, we established a $54,829 valuation allowance against our deferred tax assets. Our assessment of the realizability of our deferred tax assets is based on the weight of all available evidence, both positive and negative, including future reversals of deferred tax liabilities.

In December 2017, the Tax Cuts and Jobs Act (“Tax Legislation”) was enacted. The Tax Legislation significantly revises the U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing the territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. As of December 31, 2017, the Company has not completed its accounting for the tax effects of enactment of the Tax Act. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, or SAB 118, to address the accounting and reporting of the Tax Legislation. SAB 118 allows companies to take a reasonable period, which should not extend beyond one year from enactment of the Tax Legislation, to measure and recognize the effects of the new tax law. The Company has made a reasonable estimate of the effects on existing deferred tax balances and recognized a provisional reduction of approximately $28,163 in the Company’s net deferred tax assets before consideration of the valuation allowance, due primarily to the remeasurement of U.S. deferred tax assets at the lower enacted corporate rate. The Company recorded the adjustment during the fourth quarter of 2017; however, because of an offsetting change in our valuation allowance, there was zero net impact to net income during 2017 as a result of the legislation. The Company is still analyzing certain aspects of the Tax Legislation and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The Company will complete this analysis within the measurement period in accordance with SAB 118. The Company also continues to evaluate the impacts of the newly enacted global intangible low-taxed income (“GILTI”) provisions which subject the Company’s foreign earnings to a minimum level of tax. Because of the complexities of the new legislation, the Company has not elected an accounting policy for GILTI at this time. Recent FASB guidance indicates that accounting for GILTI either as part of deferred taxes or as a period cost are both acceptable methods. Once further information is gathered and interpretation and analysis of the tax legislation evolves, the Company will make an appropriate accounting method election.

Provision has been made for deferred U.S. income taxes on all foreign earnings based on the Company’s intent to repatriate foreign earnings. During the years ended December 31, 2017 and 2016, the Company did not recognize benefits on foreign investments due to the uncertainty of the Company being able to realize the foreign tax assets in light of current market conditions in China and Russia. This treatment decreased (increased) income tax benefit by $8,569 and ($323) for the years ended December 31, 2017 and 2016, respectively.

During 2017, 2016, and 2015, the Company incurred a net operating loss in the United States. Net operating losses associated with the 2015 tax return have been carried back in full, while certain of the net operating losses incurred in 2016 and 2017 are carried forward to offset future taxable income. The cumulative recorded tax benefit of these net operating loss carryforwards totals $59,536 and $51,722 as of December 31, 2017 and 2016, respectively, and is included in the deferred income tax asset on those respective dates. The recorded tax benefit of $59,536 as of December 31, 2017 includes the impact of the change in corporate income tax rate following the enactment of the Tax Legislation. The Company filed amended 2013 and 2014 Federal income tax returns to claim $37,397 of the tax benefit which was received as a refund in April 2016. After finalization of the 2015 Federal return and a change in the attribute of the NOL carryback, additional refunds for 2012 through 2014 tax years are being claimed in the amount of $2,206. These amounts are included within income tax receivable as of December 31, 2017. The federal NOLs generated in 2017 and 2016 will be carried forward until they are utilized or their expiration in 2037 and 2036, respectively.

The Company elected to claim bonus tax depreciation totaling $29,221 and $61,781 on assets placed in service in the United States during 2015 and 2014, respectively. This election increased the net operating loss in 2015 and reduced current taxable income in 2014. No such bonus depreciation was elected in 2016 and is not anticipated for 2017.

The Company has not recognized any uncertain tax positions as of December 31, 2017. The reserve recorded as of December 31, 2015 of $153 was associated with a period no longer subject to audit and thus was reduced to $0 during 2016.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates, the most significant of which are U.S. federal and certain state jurisdictions. In 2016, the Company received an audit notice from the Internal Revenue Service for periods 2013-2015. The Company does not anticipate any material findings. The 2016 federal tax year is also subject to examination. Various U.S. state jurisdiction tax years remain open to examination as well, although the Company believes assessments, if any, would be immaterial to its consolidated financial statements.