Company: MGY
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001698990-25-000006
Chunk: 119

Company: Magnolia Oil & Gas Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 119
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 between the annual effective tax rates and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, tax credits generated, and changes in valuation allowances. During the year ended December 31, 2022, the Company released the valuation allowance against net deferred tax assets, which resulted in additional differences between the effective tax rate and the statutory rate.A reconciliation of the statutory federal income tax expense to the income tax expense from continuing operations is as follows:Years Ended(In thousands)December 31, 2024December 31, 2023December 31, 2022Income tax expense at the federal statutory rate$103,557 $115,464 $221,954 State income tax expense, net of federal income tax benefits4,663 4,862 9,526 Noncontrolling interest in partnerships(7,002)(11,450)(33,325)Change in valuation allowances— 5,627 (183,976)Tax credits(5,042)(2,713)(4,980)Other, net(363)(4,582)(2,561)Income tax expense$95,813 $107,208 $6,638 As of December 31, 2024, the Company does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the year ended December 31, 2024, no significant amounts were incurred for interest and penalties. Currently, the Company is not aware of any issues under review that could result in significant payments, accruals, or a material deviation from its position. As of December 31, 2024, the earliest tax years subject to possible examination by the tax authorities are 2021 for U.S. federal and 2020 for Texas state.The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets. Valuation allowances for deferred tax assets are recognized when it is more likely than not that some or all of the benefit from the deferred tax assets will not be realized. As of December 31, 2024, the Company’s total gross deferred tax assets were $85.5 million. Management assessed whether it is more likely than not that the Company will generate sufficient taxable income to realize its deferred income tax assets. In making this determination, the Company considered all available positive and negative evidence and made certain assumptions. The Company considered, among other things, the overall