Income Tax Benefit/Expense |
3 Months Ended |
|---|---|
Mar. 31, 2016 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax Benefit/Expense |
Income Tax Benefit/Expense
During the first quarter of 2016 we had income tax expense of $63.5 million compared to income tax benefit of $0.2 million during the first quarter of 2015. Despite the pre-tax operating loss for the first quarter of 2016, we recognized income tax expense as a result of recording a valuation allowance of $73.1 million against our U.S. domestic deferred tax assets, which primarily consist of U.S. federal net operating losses. We established the valuation allowance based on the weight of positive and negative evidence available, including the recent and current results of operations which reflect continued degradation in market activity and including the increased contractual uncertainty materializing during the first quarter of 2016 in the U.S. jurisdictions in which we operate. In order to determine the need for a valuation allowance, we must make estimates and assumptions. Changes in these estimates and assumptions, including changes in tax laws and other changes impacting our ability to recognize the underlying deferred tax assets, may require us to adjust the valuation allowances in the future. The income tax benefit in the first quarter of 2015 was primarily related to changes in the carrying value of certain deferred tax assets due to changes in tax law and taxing jurisdictions.
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