MANAGING GROWTH
IN THE 21st CENTURY

SWIFT ENERGY COMPANY 1999 ANNUAL REPORT

Notes to Consolidated Financial Statements

 

3. Provision for Income Taxes

The following is an analysis of the consolidated income tax provision (benefit):

Year Ended December 31,
1999 1998 1997
------------ ------------ ------------
Current $      (11,819) $      214,169 $      77,402
Deferred 10,461,396 (25,380,546) 10,742,015
------------ ------------ ------------
Total $ 10,449,577 $ (25,166,377) $ 10,819,417
========= ========= =========

 

There are differences between income taxes computed using the statutory rate (35% for 1999, 1998, and 1997) and our effective income tax rates (35.1%, 34.3%, and 32.7% for 1999, 1998, and 1997, respectively), primarily as the result of certain tax credits available to us. Reconciliations of income taxes computed using the statutory rate to the effective income tax rates are as follows:

1999 1998 1997
------------ ------------ ------------
Income taxes computed at federal statutory rate $10,407,653 $(25,687,053) $11,595,362
State tax provisions, net of federal benefits (7,801) 23,949 48,058
Nonconventional fuel source credit --- (287,000) (294,000)
Depletion deductions in excess of basis --- (42,500) (51,000)
Other, net 49,725 826,227 (479,003)
------------ ------------ ------------
Provision (benefit) for income taxes $ 10,449,577 $ (25,166,377) $ 10,819,417
=========== =========== ===========

 

The tax effects of temporary differences representing the net deferred tax liability (asset) at December 31, 1999 and 1998, were as follows:

1999 1998
--------------- ---------------
Deferred tax assets:
   Alternative minimum tax credits $(1,979,399) $(1,979,399)
   Other (237,587) (237,587)
--------------- ---------------
      Total deferred tax assets $(2,216,986) $(2,216,986)
Deferred tax liabilities:
   Oil and gas properties $ 11,960,417 $ 1,531,651
   Other 436,700 430,351
---------------- ----------------
      Total deferred tax liabilities $ 12,397,117 $ 1,962,002
---------------- ----------------
Net deferred tax liability (asset) $10,180,131 $ (254,984)
============== ==============

 

We did not record any valuation allowances against deferred tax assets at December 31, 1999 and 1998.

At December 31, 1999, we had alternative minimum tax credits of $1,979,399 that carry forward indefinitely and are available to reduce future regular tax liability to the extent they exceed the related tentative minimum tax otherwise due.

 

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