Income Taxes

For the three months ended June 30, 2019 the Successor Company recorded income tax expense of $17.0 million on pre-tax book income of $59.9 million, resulting in an effective tax rate for the three months ended June 30, 2019 of approximately 28.3%. For the Successor Company period June 4, 2018 through June 30, 2018, the Successor Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate of approximately 34.4%. For the Predecessor Company period April 1, 2018 through June 3, 2018, the Predecessor Company recorded income tax benefit of $176.7 million on pre-tax book income of $524.4 million, resulting in an effective tax rate of approximately (33.7)%.

For the six months ended June 30, 2019 the Successor Company recorded income tax expense of $16.8 million on pre-tax book income of $60.2 million, resulting in an effective tax rate of approximately 27.9%. For the Successor Company period June 4, 2018 through June 30, 2018, the Company recorded income tax expense of $2.6 million on pre-tax book income of $7.6 million, resulting in an effective tax rate of approximately 34.4%. For the Predecessor Company period January 1, 2018 through June 3, 2018, the Predecessor Company recorded an income tax benefit of $176.9 million on pre-tax book income of $519.3 million, resulting in an effective tax rate of approximately (34.1)%.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the three months and six months ended June 30, 2019 primarily relates to state and local income taxes, the effect of certain statutory non-deductible expenses, excess tax benefits related to share-based compensation awards, and the tax effect of changes in uncertain tax positions.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Successor Company period June 4, 2018 through June 30, 2018 was attributable to state and local income taxes, the tax effect of certain statutory non-deductible expenses, changes in valuation allowance, and the tax effect of certain changes in uncertain tax positions.

The difference between the effective tax rate and the federal statutory rate of 21.0% for the Predecessor Company period April 1, 2018 through June 3, 2018, and January 1, 2018 through June 3, 2018 primarily related to the income tax exclusion of cancellation of indebtedness income, the Company's elections to increase the tax basis in certain assets, statutory state and local income taxes, the impact of non-deductible expenses, and changes to the valuation allowance.

The Company recognizes the benefits of deferred tax assets only as its assessment indicates that it is more likely than not that the deferred tax assets will be recognized in accordance with ASC Topic 740, Income Taxes ("ASC 740"). The Company reviews the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to utilize existing deferred tax assets. As of June 30, 2019, the Company has not recorded a valuation allowance since the Company continues to believe, on the basis of its evaluation, that its deferred tax assets meet the more likely than not recognition standard for recovery. The Company will continue to monitor the valuation of deferred tax assets, which requires judgment in assessing the likely future tax consequences of events that are recognized in the Company's financial statements or tax returns as well as judgment in projecting future profitability.