SEC Filings

10-Q
RANGE RESOURCES CORP filed this Form 10-Q on 10/23/2018
Entire Document
 

(6) INCOME TAXES

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

 

 

Three Months Ended

September 30,

 

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

 

2017

 

 

 

2018

 

 

 

2017

 

Income tax expense (benefit)

$

24,137

 

 

$

(71,992

)

 

$

38,295

 

 

$

98,054

 

Effective tax rate

 

33.2

%

 

 

36.1

%

 

 

68.1

%

 

 

46.7

%

 

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 third quarter and first nine months ended 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

September 30,

 

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

 

2017

 

 

 

2018

 

 

 

2017

 

Total income (loss) before income taxes

$

72,676

 

 

$

(199,692

)

 

$

56,236

 

 

$

210,015

 

U.S. federal statutory rate

 

21

%

 

 

35

%

 

 

21

%

 

 

35

%

Total tax expense (benefit) at statutory rate

 

15,262

 

 

 

(69,892

)

 

 

11,810

 

 

 

73,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and local income taxes, net of federal benefit

 

2,691

 

 

 

(6,537

)

 

 

3,439

 

 

 

6,591

 

Non-deductible executive compensation

 

48

 

 

 

296

 

 

 

601

 

 

 

436

 

Equity compensation

 

6

 

 

 

56

 

 

 

2,146

 

 

 

4,808

 

Change in valuation allowances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal net operating loss carryforwards & other

 

 

 

 

69

 

 

 

 

 

 

3,487

 

State net operating loss carryforwards & other

 

5,558

 

 

 

4,286

 

 

 

19,194

 

 

 

10,498

 

Rabbi trust and other

 

100

 

 

 

(508

)

 

 

1,499

 

 

 

(1,561

)

Permanent differences and other

 

472

 

 

 

238

 

 

 

(394

)

 

 

290

 

Total expense (benefit) for income taxes

$

24,137

 

 

$

(71,992

)

 

$

38,295

 

 

$

98,054

 

Effective tax rate

 

33.2

%

 

 

36.1

%

 

 

68.1

%

 

 

46.7

%

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 September 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.

(7) INCOME (LOSS) PER COMMON SHARE

Basic income or loss per share attributable to common shareholders is computed as (1) income or loss attributable to common shareholders (2) less income allocable to participating securities (3) divided by weighted average basic shares outstanding. Diluted income or loss per share attributable to common shareholders is computed as (1) basic income or loss attributable to common shareholders (2) plus diluted adjustments to income allocable to participating securities (3) divided by weighted average diluted shares outstanding. The following sets forth a reconciliation of income or loss attributable to common shareholders to basic income or loss attributable to common shareholders to diluted income or loss attributable to common shareholders (in thousands except per share amounts):

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