Income Taxes

12 Months Ended

Dec. 31, 2014

9. INCOME TAXES:

Income (loss) before income tax benefit is as follows:

		Year Ended December 31,
		2014		2013		2012
United States	$	505,689	$	210,580	$	(2,892,207)
Foreign		31,338		23,642		15,096
Total	$	537,027	$	234,222	$	(2,877,111)


The consolidated income tax (benefit) provision is comprised of the following:
		Year Ended December 31,
		2014		2013		2012
Current tax:
U.S. federal, state and local	$	(110)	$	(8,491)	$	9,037
Foreign		(6,709)		4,881		3,326
(Reduction in) current tax benefit on stock based compensation:
U.S. federal, state and local		-		-		(4,427)
Total current tax expense (benefit)		(6,819)		(3,610)		7,936
Deferred tax:
U.S. federal, state and local		-		-		(708,160)
Foreign		995		(6)		11
Total deferred tax expense (benefit)		995		(6)		(708,149)
Total income tax (benefit) provision	$	(5,824)	$	(3,616)	$	(700,213)

The income tax provision (benefit) from continuing operations differs from the amount that would be computed by applying the U.S. federal income tax rate of 35% to pretax income as a result of the following:


		Year Ended December 31,
		2014		2013		2012
Income tax provision (benefit) computed at the U.S. statutory rate	$	187,959	$	81,978	$	(1,006,989)
State income tax provision (benefit) net of federal benefit		8,023		1,329		(136,112)
Valuation allowance		(199,038)		(81,923)		446,148
Tax effect of rate change		15,457		(2,871)		1,358
Foreign rate differential		(16,314)		(3,508)		(5,531)
Other, net		(1,911)		1,379		913

Total income tax (benefit) provision	$	(5,824)	$	(3,616)	$	(700,213)


The tax effects of temporary differences that give rise to significant components of the Company's deferred tax assets and liabilities are as follows:
				December 31,
				2014		2013
Deferred tax assets - current:
Derivative instruments, net			$	-	$	9,636
Incentive compensation/other, net				6,150		7,641
				6,150		17,277
Valuation allowance				-		(16,778)
Net deferred tax assets - current			$	6,150	$	499
Deferred tax liabilities - current:
Derivative instruments, net			$	36,788	$	499
Net deferred tax liabilities - current			$	36,788	$	499
Net deferred tax liability - current			$	30,638	$	-
Deferred tax assets - non-current:
Property and equipment				-		131,340
Deferred gain				48,319		52,045
U.S. federal tax credit carryforwards				16,144		16,254
U.S. net operating loss carryforwards				147,336		71,843
U.S. state net operating loss carryforwards				53,654		36,205
Asset retirement obligations				45,039		26,876
Incentive compensation/other, net				19,142		13,007
				329,634		347,570
Valuation allowance				(161,480)		(346,596)
Net deferred tax assets - non-current			$	168,154	$	974
Deferred tax liabilities - non-current:
Property and equipment				137,514		-
Other				-		968
Net non-current tax liabilities			$	137,514	$	968
Net non-current tax asset			$	30,640	$	6
Deferred tax liabilities - non-current:
Other - non-US				992		-

In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Among other items, management considers the scheduled reversal of deferred tax liabilities, historical taxable income, projected future taxable income, and available tax planning strategies.

At December 31, 2014 and 2013, the Company recorded a valuation allowance against certain deferred tax assets of $161.5 million and $363.4 million, respectively. Some or all of this valuation allowance may be reversed in future periods against future income. The Company’s valuation allowance changed by $201.9 million from December 31, 2013 to December 31, 2014. Of this amount, $199.0 million reduced the Company’s current year deferred tax expense, and $2.9 million was reflected through shareholders’ equity.

As of December 31, 2014, the Company had approximately $14.1 million of U.S. federal alternative minimum tax (AMT) credits available to offset regular U.S. Federal income taxes. These AMT credits do not expire and can be carried forward indefinitely. The Company has $0.5 million of general business credits available to offset U.S. federal income taxes. These general business credits expire in 2032. In addition, the Company has $1.7 million of foreign tax credit carryforwards, none of which expire prior to 2017.

The Company generated a U.S. federal tax loss of $214.9 million and $260.1 million for the years ended December 31, 2014 and 2013, respectively. Of the 2013 loss, $54.5 million was carried back to offset taxable income generated in prior tax years. An income tax receivable of $8.0 million was recorded at December 31, 2013 and was reflected as a reduction in income tax expense in the Consolidated Statements of Operations for the year ended December 31, 2013. The remaining U.S. federal tax net operating loss of $420.9 million will be carried forward to offset taxable income generated in future years, and if unutilized, will expire in 2033 and 2034. The Company has Pennsylvania state tax net operating loss carry forwards of $798.4 million which will expire between 2031 and 2034. The Company has immaterial state tax net operating loss carry forwards in other jurisdictions, none of which expire prior to 2020.

The Company generated a Canada Federal and Provincial tax loss of $23.8 million for the year ended December 31, 2014. This loss will be carried back to offset taxable income generated in the prior three tax years. An income tax receivable of $6.2 million has been recorded at December 31, 2014 and is reflected as a reduction in 2014 income tax expense in the Consolidated Statement of Operations. As a result of this carryback, no Canada Federal and Provincial tax loss will be carried forward to offset taxable income generated in future years.

The Company did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations related to accounting for uncertain tax positions. The amount of unrecognized tax benefits did not change as of December 31, 2014.

Estimated interest and penalties related to potential underpayment on any unrecognized tax benefits are classified as a component of tax expense in the Consolidated Statements of Operations. The Company has not incurred any interest or penalties associated with unrecognized tax benefits.

The Company files a consolidated federal income tax return in the United States federal jurisdiction and various combined, consolidated, unitary, and separate filings in several states, and international jurisdictions. With certain exceptions, the income tax years 2011 through 2014 remain open to examination by the major taxing jurisdictions in which the Company has business activity.

The undistributed earnings of the Company’s U.S. subsidiaries are considered to be indefinitely invested outside of Canada. Accordingly, no provision for Canadian income taxes and/or withholding taxes has been provided thereon.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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