Antero Resources Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of income tax expense from continuing operations

For the years ended December 31, 2017, 2018 and 2019, income tax expense (benefit) consisted of the following (in thousands):


	Year ended December 31,
	2017		2018		2019
Current income tax expense (benefit)	$	75		—		5,048
Deferred income tax benefit		(295,126)		(128,857)		(79,158)
Total income tax benefit	$	(295,051)		(128,857)		(74,110)

Schedule of reconciliation of income tax expense from continuing operations

Income tax expense (benefit) differs from the amount that would be computed by applying the U.S. statutory federal income tax rate of 35% to the year ended December 31, 2017 and 21% to the years ended December 31, 2018 and 2019 to income or loss before taxes as a result of the following (in thousands):


	Year ended December 31,
	2017		2018		2019
Federal income tax expense (benefit)	$	171,530		(36,657)		(77,122)
State income tax expense (benefit), net of federal benefit		10,779		(12,627)		(8,826)
Change in Federal tax rate, net of state benefit ⁽¹⁾		(427,962)		—		—
Change in State tax rate, net of federal effect		—		(40,415)		24,041
Nondeductible equity-based compensation		12,098		6,079		6,920
Dividends received deduction		—		—		(4,201)
Noncontrolling interest in Antero Midstream Partners		(59,523)		(73,881)		(10,998)
Deconsolidation adjustment		—		—		(6,626)
Change in valuation allowance		(2,073)		28,116		1,325
Other		100		528		1,377
Total income tax benefit	$	(295,051)		(128,857)		(74,110)

(1)

The change in the Federal tax rate was due to the passage of Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act. The passage of this legislation resulted in the Company generating a deferred tax benefit in 2017 primarily due to the reduction in the U.S. statutory rate from 35% to 21%.

Schedule of net deferred tax assets and liabilities


	2018		2019
Deferred tax assets:
Net operating loss carryforwards	$	734,255		560,136
Equity-based compensation		10,633		7,669
Investment in Antero Midstream		—		172,460
Other		15,726		15,754
Total deferred tax assets		760,614		756,019
Valuation allowance		(45,477)		(46,802)
Net deferred tax assets		715,137		709,217
Deferred tax liabilities:
Unrealized gains on derivative instruments		271,747		206,677
Oil and gas properties		1,055,850		1,284,528
Investment in Antero Midstream Partners		11,258		—
Other		27,070		—
Total deferred tax liabilities		1,365,925		1,491,205
Net deferred tax liabilities	$	(650,788)		(781,987)