Chesapeake Energy 2012 Annual Report Download - page 125

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
115
The effective income tax expense (benefit) differed from the computed "expected" federal income tax expense
on earnings before income taxes for the following reasons:
Years Ended December 31,
2012 2011 2010
($ in millions)
Income tax expense (benefit) at the federal statutory rate (35%) ............ $ (341) $ 1,008 $ 1,009
State income taxes (net of federal income tax benefit) ............................ (38) 74 78
Other ........................................................................................................ (1) 41 23
Total ................................................................................................... $ (380) $ 1,123 $ 1,110
Deferred income taxes are provided to reflect temporary differences in the basis of net assets for income tax and
financial reporting purposes. The tax-effected temporary differences and tax loss carryforwards which comprise deferred
taxes are as follows:
Years Ended December 31,
2012 2011
($ in millions)
Deferred tax liabilities:
Natural gas and oil properties ............................................................................. $ (1,999) $ (2,883)
Other property and equipment ............................................................................ (436) (634)
Investments ........................................................................................................ — (56)
Volumetric production payments ......................................................................... (1,432) (1,453)
Contingent convertible debt ................................................................................ (416) (396)
Deferred tax liabilities ................................................................................... (4,283) (5,422)
Deferred tax assets:
Net operating loss carryforwards ...................................................................... 414 1,198
Derivative instruments ...................................................................................... 172 395
Asset retirement obligations ............................................................................. 142 123
Investments ...................................................................................................... 106 —
Deferred stock compensation ........................................................................... 47 62
Accrued liabilities .............................................................................................. 90 82
Noncontrolling interest liabilities ....................................................................... 178 114
Alternative minimum tax credits ........................................................................ 225 257
State statutory depletion ................................................................................... 137 121
Other ................................................................................................................ 55 (29)
Deferred tax assets ...................................................................................... 1,566 2,323
Net deferred tax asset (liability) ............................................................................ (2,717) (3,099)
Other non-current tax liabilities ............................................................................. — (246)
Total deferred tax liabilities ........................................................................... $ (2,717) $ (3,345)
Reflected in accompanying balance sheets as:
Current deferred income tax asset ..................................................................... $ 90 $ 139
Non-current deferred income tax liability ............................................................ (2,807) (3,484)
Total ............................................................................................................. $ (2,717) $ (3,345)
As of December 31, 2012 and 2011, we classified $90 million and $139 million of deferred tax assets as current
that were attributable to current temporary differences associated with accrued liabilities, derivative liabilities and other
items. As of December 31, 2012 and 2011, non-current deferred tax liabilities on the consolidated balance sheets
included net non-current deferred tax liabilities of $2.807 billion and $3.238 billion, respectively.