goodrich petroleum corporation - RR DONNELLEY FINANCIAL

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GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED <strong>FINANCIAL</strong> STATEMENTS NOTE 6—Income Taxes Income tax (expense) benefit consisted of the following (in thousands): Year Ended December 31, 2011 2010 2009 Current: Federal ................................................... $— $85 $ 5,382 State ..................................................... — — 10,070 — 85 15,452 Deferred: Federal ................................................... — — 48,121 State ..................................................... — — 3,725 — — 51,846 Total ..................................................... $— $85 $67,298 The following is a reconciliation of the U.S. statutory income tax rate at 35% to our income (loss) before income taxes (in thousands): Year Ended December 31, 2011 2010 2009 Income tax (expense) benefit Tax at U.S. statutory income tax ....................... $11,115 $ 91,772 $111,412 Valuation allowance ................................ (9,909) (93,497) (54,256) State income taxes-net of federal benefit ................ (762) 1,860 10,271 Nondeductible expenses and other ..................... (444) (50) (129) Total tax (expense) benefit ........................... $ — $ 85 $ 67,298 78
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED <strong>FINANCIAL</strong> STATEMENTS The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in thousands): December 31, 2011 2010 Current deferred tax assets: Accrued liabilities .......................................... $ 849 $ 531 Contingent liabilities and other ............................... 44 1,502 Less valuation allowance .................................... (750) (1,629) Total current deferred tax assets ............................... 143 404 Current deferred tax liabilities: Derivative financial instruments ............................... (19,770) (8,564) Bond discount ............................................. — (7,123) Debt discount and financing costs ............................. — (2,921) Accrued liabilities .......................................... (93) (1,491) Total current deferred tax liabilities ............................ (19,863) (20,099) Net current deferred tax liability .............................. $ (19,720) $ (19,695) Noncurrent deferred tax assets: Operating loss carry-forwards ................................ $132,442 $ 105,105 Texas Margin Credit ........................................ 607 607 Louisiana NOL ............................................ 998 877 Statutory depletion carry-forward ............................. 7,035 7,034 AMT tax credit carry-forward ................................ 1,245 1,246 Derivative financial instruments ............................... 6,097 — Compensation ............................................. 3,795 3,842 Contingent liabilities and other ............................... — 557 Property and equipment ..................................... 42,733 70,619 Total gross noncurrent deferred tax assets ....................... 194,952 189,887 Less valuation allowance .................................... (163,875) (152,831) Net noncurrent deferred tax assets ............................. 31,077 37,056 Noncurrent deferred tax liabilities: Derivative financial instruments ............................... — (3,978) Bond discount ............................................. (49) — Contingent liabilities and other ............................... (982) — Debt discount ............................................. (10,326) (13,383) Total non-current deferred tax liabilities ........................ (11,357) (17,361) Net non-current deferred tax asset ............................. $ 19,720 $ 19,695 The valuation allowance for deferred tax assets increased by $10.2 million in 2011. In determining the carrying value of a deferred tax asset, accounting standards provide for the weighing of evidence in estimating whether and how much of a deferred tax asset may be recoverable. As we have incurred net operating losses in 2011 and prior years, relevant accounting guidance suggests that cumulative losses in recent years constitute significant negative evidence, and that future expectations about income are insufficient to overcome a history of such losses. Therefore, with the before-mentioned adjustment of $10.2 million, we have reduced the carrying value of our net deferred tax asset to zero. The valuation allowance has no impact on our net operating loss 79
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Performance 1 Letter to Shareholder
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Capital Expenditures ($MM) LETTER T
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Operating Cash Flow ($MM) drawn und
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GOODRICH PETROLEUM CORPORATION ANNU
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GLOSSARY OF CERTAIN OIL AND NATURAL
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Working interest is the operating i
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Eagle Ford Shale Trend As of Decemb
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The following table presents our re
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Productive wells consist of produci
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Net Production, Unit Prices and Cos
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Environmental and Occupational Heal
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operate, have adopted, and other st
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Section 27A of the Securities Act o
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Our operations are subject to gover
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equirements for GHG emissions from
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Changes in commodity prices signifi
Page 34 and 35: Additionally, as management’s vie
Page 36 and 37: • explosions; • uncontrollable
Page 38 and 39: PART II Item 5. Market for Registra
Page 40 and 41: Item 6. Selected Financial Data The
Page 42 and 43: locations. Our Haynesville Shale ac
Page 44 and 45: our Cotton Valley Taylor Sand wells
Page 46 and 47: Operating expenses in 2010 include
Page 48 and 49: Exploration expenses for 2010 incre
Page 50 and 51: additional oil and natural gas leas
Page 52 and 53: We have in place a $600 million Sen
Page 54 and 55: Year ended December 31, 2010 Compar
Page 56 and 57: As defined in the credit agreement
Page 58 and 59: offering costs of $2.7 million). Ea
Page 60 and 61: government regulation before the ti
Page 62 and 63: Item 7A. Quantitative and Qualitati
Page 64 and 65: MANAGEMENT’S ANNUAL REPORT ON INT
Page 66 and 67: REPORT OF INDEPENDENT REGISTERED PU
Page 68 and 69: GOODRICH PETROLEUM CORPORATION AND
Page 98 and 99: PART III Item 10. Directors and Exe
Page 100 and 101: Gene Washington is the former Direc
Page 102 and 103: 4.7 Form of 5.00% Convertible Senio
Page 104 and 105: 12.1* Ratio of Earnings to Fixed Ch
Page 106 and 107: Signature Title /s/ /s/ /s/ ARTHUR
Page 108: Corporate Headquarters 801 Louisian
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goodrich petroleum corporation - RR DONNELLEY FINANCIAL

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