|12 Months Ended|
Dec. 31, 2017
|Income Tax Disclosure [Abstract]|
The Company's Income tax expense (benefit) is as follows (amounts in thousands):
Total Income tax expense (benefit) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following (amounts in thousands):
Components of deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows (amounts in thousands):
On December 22, 2017, new tax reform legislation that significantly reforms the Internal Revenue Code of 1986, as amended, was enacted (the "2017 Tax Act"). The 2017 Tax Act includes numerous changes to existing tax law, including a permanent reduction in the federal corporate income tax rate from 35% to 21%. The rate reduction is effective for the Company as of January 1, 2018. This rate reduction, along with the repeal of the corporate Alternative Minimum Tax ("AMT") resulted in a reduction of our deferred tax liabilities and a corresponding deferred and current tax benefit.
The 2017 Tax Act is comprehensive containing several other provisions, some of which will not materially impact the Company. Other provisions, such as the limitation of deductions for interest expense and limitations on the usage of net operating loss carryforwards ("NOLs") generated in future years, could have significant impact to the Company’s future tax position and cash taxes. The provisions of the 2017 Tax Act related to foreign earnings are not expected to impact the Company. These estimates are based on the Company's initial analysis of the 2017 Tax Act and may be adjusted in future periods as required. The 2017 Tax Act has significant complexity and future implementation guidance from the Internal Revenue Service, clarifications of state tax law or the completion of the Company’s 2017 tax return filings could all impact these estimates. The Company does not believe potential adjustments in future periods would materially impact the Company's financial condition or results of operations.
For the year ended December 31, 2017, the valuation allowance decreased by $9,722,000. The change in the valuation allowance is primarily attributable to the impact of the 2017 Tax Act corporate income tax rate change from 35% to 21% and changes in estimated blended state tax rates, which net decreased the valuation allowance by $55,704,000. This decrease was
offset by $39,499,000 related to federal income tax expense and an increase of $6,483,000 related to other adjustments.
As of December 31, 2017, the Company had $679,925,000 of federal net operating loss carryforwards, which begin to expire, if unused, in 2024. Approximately $129,521,000 of the Company’s federal net operating losses are subject to IRC Section 382 limitations. In addition, the Company had available for federal income tax purposes an alternative minimum tax credit carryforward of $426,000,which will be refunded in years 2018 through 2021 as a result of the 2017 Tax Act. As of December 31, 2017, the Company had available for state income tax purposes net operating loss carryforwards of $226,509,000 and state tax credits of $883,000, the latter of which will expire in 2026.
As of December 31, 2017, the Company’s federal income tax returns for the 2014 through 2017 tax years remain subject to examination by the IRS. The Company’s state income tax returns subsequent to 2012 are subject to examination by state tax authorities.
A reconciliation of the beginning and ending amount of uncertain tax positions, which is recorded in other long term liabilities, is as follows (amounts in thousands):
When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Any accrual of interest and penalties related to underpayment of income taxes on uncertain tax positions is included in Income tax expense in the accompanying consolidated statements of operations. As of December 31, 2017, accrued interest and penalties related to uncertain tax positions were approximately $86,000. The Company does not expect a significant change in uncertain tax positions in the next twelve months.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef