|9 Months Ended|
Sep. 30, 2018
|Income Tax Disclosure [Abstract]|
9. Income Taxes
Our income tax expense for the three and nine months ended September 30, 2018 was $0.1 million and $0.4 million, respectively. Our income tax expense for the three months ended September 30, 2017 was $5.5 million and our income tax benefit for the nine months ended September 30, 2017 was $11.1 million. Our effective tax rate was not meaningful for the periods presented. Based on a full year forecast, we are not expecting any current income tax expense. In addition, immaterial deferred income tax expense was recorded due to dollar-for-dollar offsets by our valuation allowance. The income tax expense for the three months ended September 30, 2017 relates to revisions under GAAP using the annualized effective tax rate method in computing income tax expense or benefit for interim periods and the income tax benefit for the nine months ended September 30, 2017 relates to net operating loss carryback claims made pursuant to Internal Revenue Code (“IRC”) Section 172(f) (related to rules for “specified liability losses”), which permit certain platform dismantlement, well abandonment and site clearance costs to be carried back 10 years.
During the nine months ended September 30, 2018, we did not receive any income tax refunds and made no income tax payments of significance. During the nine months ended September 30, 2017 we received $11.9 million of income tax refunds and made $0.2 million of income tax payments.
As of September 30, 2018, we recorded current income taxes receivable of $65.2 million. As of December 31, 2017, the balance sheet reflected current income taxes receivable of $13.0 million and non-current income taxes receivable of $52.1 million. The receivable primarily relates to a net operating loss claim carried back for 2017 and net operating loss claims for the years 2012, 2013 and 2014 that were carried back to prior years. These carryback claims are made pursuant to IRC Section 172(f) described above. The refund claims require a review by the Congressional Joint Committee on Taxation.
As of September 30, 2018 and December 31, 2017, our valuation allowance was $148.3 million and $171.5 million, respectively, related to federal and state deferred tax assets. Net deferred tax assets were recorded related to NOLs and temporary differences between the book and tax basis of assets and liabilities expected to produce tax deductions in future periods. The realization of these assets depends on recognition of sufficient future taxable income in specific tax jurisdictions in which those temporary differences or net operating losses are deductible. In assessing the need for a valuation allowance on our deferred tax assets, we consider whether it is more likely than not that some portion or all of them will not be realized. Although our net deferred tax assets and the related valuation allowance reflect the provisions of the Tax Cuts and Jobs Act (“TCJA”), due to the timing and the complexity of the provisions of the TCJA, further adjustments may be required during 2018 in determination of the final effect in our financial statements.
The tax years 2013 through 2017 remain open to examination by the tax jurisdictions to which we are subject.
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://fasb.org/us-gaap/role/ref/legacyRef