Note 4 - Income Taxes

The income tax (expense) benefit recorded for the three and nine months ended September 30, 2018, and 2017, differs from the amounts that would be provided by applying the statutory United States federal income tax rate to income or loss before income taxes primarily due to the effect of state income taxes, excess tax benefits and deficiencies from share-based payment awards, changes in valuation allowances, and accumulated impacts of other smaller permanent differences. The quarterly rate can also be affected by the proportional impacts of forecasted net income or loss as of each period end presented.

The provision for income taxes for the three and nine months ended September 30, 2018, and 2017, consisted of the following:



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(in thousands)
Current portion of income tax (expense) benefit:
Federal	$	—		$	2,832		$	—		$	—
State	(85		)	(230		)	(670		)	(1,633		)
Deferred portion of income tax (expense) benefit	36,833			36,668			(60,672		)	67,458
Income tax (expense) benefit	$	36,748		$	39,270		$	(61,342	)	$	65,825
Effective tax rate	21.3		%	30.6		%	23.6		%	32.8		%

The enactment of the 2017 Tax Act on December 22, 2017, reduced the Company’s federal tax rate for 2018 and future years from 35 percent to 21 percent. Although the Company believes it has properly analyzed the tax accounting impacts of the 2017 Tax Act, it will continue to monitor provisions with discrete rate impacts, such as the limitation on executive compensation for subsequent events and guidance within the one-year measurement period. There are no new estimates or finalized income tax items associated with the 2017 Tax Act included in income tax (expense) benefit for the three and nine months ended September 30, 2018.

On a year-to-date basis, a change in the Company’s effective tax rate between reporting periods will generally reflect differences in its estimated highest marginal state tax rate due to changes in the composition of income or loss from Company activities, including divestitures, among multiple state tax jurisdictions. Excess tax benefits and deficiencies from share-based payment awards impact the Company’s effective tax rate between periods. Cumulative effects of state tax rate changes are reflected in the period legislation is enacted.

In 2017, the Company re-evaluated various factors affecting deferred tax assets related to net operating losses and tax credits and determined utilization would be appropriate. The change in the current portion of income tax (expense) benefit between periods reflects the effect of this determination.

Subsequent to the quarter ended September 30, 2018, the Company received its anticipated $5.9 million cash refund for a net operating loss carryback claim. During the third quarter of 2018, the Internal Revenue Service finalized its examination of the net operating loss claims back to tax years 2003 through 2005 with no changes to claimed amounts. The Company is generally no longer subject to United States federal or state income tax examinations by tax authorities for years before 2015.