SEC Filings

10-Q
RANGE RESOURCES CORP filed this Form 10-Q on 07/30/2018
Entire Document
 

(6) INCOME TAXES

Income tax (benefit) expense was as follows (in thousands):

 

 

Three Months Ended

June 30,

 

 

 

Six Months Ended

June 30,

 

 

2018

 

 

 

2017

 

 

 

2018

 

 

 

2017

 

Income tax (benefit) expense

$

(28,518

)

 

$

57,651

 

 

$

14,158

 

 

$

170,046

 

Effective tax rate

 

26.3

%

 

 

45.3

%

 

 

(86.1

%)

 

 

41.5

%

 

We compute our quarterly taxes under the effective tax rate method based on applying an anticipated annual effective rate to our year-to-date income, except for discrete items. Income taxes for discrete items are computed and recorded in the period that the specific transaction occurs. For second quarter and first six months ended June 30, 2018 and 2017, our overall effective tax rate was different than the federal statutory rate due primarily to state income taxes (including adjustments to state income tax valuation allowances), equity compensation and other tax items which are detailed below (in thousands).

 

 

Three Months Ended

June 30,

 

 

 

Six Months Ended

June 30,

 

 

2018

 

 

 

2017

 

 

 

2018

 

 

 

2017

 

Total (loss) income before income taxes

$

(108,354

)

 

$

127,201

 

 

$

(16,440

)

 

$

409,707

 

U.S. federal statutory rate

 

21

%

 

 

35

%

 

 

21

%

 

 

35

%

Total tax (benefit) expense at statutory rate

 

(22,754

)

 

 

44,520

 

 

 

(3,452

)

 

 

143,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and local income taxes, net of federal benefit

 

(3,745

)

 

 

4,146

 

 

 

749

 

 

 

13,128

 

Non-deductible executive compensation

 

291

 

 

 

 

 

 

553

 

 

 

140

 

Equity compensation

 

1,476

 

 

 

2,228

 

 

 

2,140

 

 

 

4,752

 

Change in valuation allowances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal net operating loss carryforwards & other

 

 

 

 

2,562

 

 

 

 

 

 

3,418

 

State net operating loss carryforwards & other

 

(2,042

)

 

 

4,127

 

 

 

13,636

 

 

 

6,212

 

Rabbi trust and other

 

18

 

 

 

68

 

 

 

1,399

 

 

 

(1,053

)

Permanent differences and other

 

(1,762

)

 

 

 

 

 

(867

)

 

 

52

 

Total (benefit) expense for income taxes

$

(28,518

)

 

$

57,651

 

 

$

14,158

 

 

$

170,046

 

Effective tax rate

 

26.3

%

 

 

45.3

%

 

 

(86.1

%)

 

 

41.5

%

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law. The law significantly reformed the Internal Revenue Code of 1986, as amended. The reduction in the corporate tax rate required a one-time revaluation of certain tax related assets and liabilities to reflect their value at the lower corporate tax rate of 21%. Due to the complexities involved in the accounting for the enactment of the new law, the SEC Staff Accounting Bulletin (“SAB”) 118 allowed a provisional estimate for the year ended December 31, 2017, which we made. As of June 30, 2018, we have not made any material adjustments to our provisional estimate at year-end 2017. We have made a reasonable estimate of the effect on our deferred tax balances. We will continue to analyze the impact of the new law and additional impacts will be recorded as they are identified during the measurement period provided for in SAB 118.

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