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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes The Company has elected to be taxed as a REIT effective January 1, 2013, pursuant to the U.S. Internal Revenue Code of 1986, as amended. As a REIT, generally the Company will not be subject to federal corporate income taxes on ordinary taxable income and capital gains income from real estate investments that it distributes to its stockholders. The Company will, however, be subject to corporate income taxes on built-in gains (the excess of fair market value over tax basis at January 1, 2013) that result from gains on the sale of certain assets prior to January 1, 2018. In addition, the Company will continue to be required to pay federal and state corporate income taxes on earnings of its taxable REIT subsidiaries (“TRSs”). The income tax (provision) benefit for continuing operations consists of the following (amounts in thousands):
|  | 2017 |  |  | 2016 |  |  | 2015 |
CURRENT: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (1,107 | ) |  | $ | (1,788 | ) |  | $ | (763 | )
State |  |  | (2,375 | ) |  |  | (1,291 | ) |  |  | (1,229 | )
Total current provision |  |  | (3,482 | ) |  |  | (3,079 | ) |  |  | (1,992 | )
DEFERRED: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 32,308 |  |  |  | 321 |  |  |  | 8,866 |
State |  |  | 18,299 |  |  |  | (642 | ) |  |  | (248 | )
Effect of federal tax law change |  |  | 2,030 |  |  |  | — |  |  |  | 5,229 |
Total deferred (provision) benefit |  |  | 52,637 |  |  |  | (321 | ) |  |  | 13,847 |
Total (provision) benefit for income taxes |  | $ | 49,155 |  |  | $ | (3,400 | ) |  | $ | 11,855 |
On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted. The TCJA lowered the U.S. federal corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. At December 31, 2017, the Company has not completed its accounting for the tax effects of the enactment; however, based on a reasonable estimate, the Company recorded a non-cash tax benefit of $2.0 million during the fourth quarter of 2017 to reflect the impact of this rate change on existing deferred tax amounts, which is included above as a component of the benefit for income taxes for 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. The ultimate impact may differ from these provisional amounts due to additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued and actions the Company may take as a result of the TCJA. The accounting is expected to be complete when the 2017 U.S. corporate tax return is filed in 2018. The Company evaluates its deferred tax assets each reporting period to determine if it is more likely than not that those assets will be realized or if a valuation allowance is needed. In the fourth quarter of 2017, due to projected future taxable income of our TRSs driven by fourth quarter 2017 modifications to internal hotel leases, the Company determined that the release of a significant portion of its federal and state valuation allowance was appropriate. This release of valuation allowance totaling $53.4 million was the primary factor for the large income tax benefit for 2017 and is included as a component of the benefit for income taxes for 2017. In December 2015, the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”) was passed. The PATH Act made permanent several key tax provisions including lowering the recognition period related to built-in gains from ten years to five years. As a result, the Company recorded a one-time, non-cash tax benefit of $5.2 million during the fourth quarter of 2015 to reflect this change. The Company is required to distribute at least 90% of its annual taxable income, excluding net capital gains, to its stockholders in order to maintain its qualification as a REIT. The taxability of distributions to stockholders is determined by the Company’s earnings and profits, which differs from net income reported for financial reporting purposes. The estimated taxability of cash distributions to common shareholders is as follows (per common share):
|  | 2017 |  |  | 2016 |  |  | 2015 |
Ordinary income |  | $ | 2.97 |  |  | $ | 2.98 |  |  | $ | 2.50 |
Capital gains |  |  | 0.03 |  |  |  | 0.17 |  |  |  | 0.23 |
Return of capital |  |  | 0.15 |  |  |  | — |  |  |  | — |
|  | $ | 3.15 |  |  | $ | 3.15 |  |  | $ | 2.73 |
The differences between the income tax provision calculated at the statutory U.S. federal income tax rate of 35% and the actual income tax (provision) benefit recorded for continuing operations are as follows (amounts in thousands):
|  | 2017 |  |  | 2016 |  |  | 2015 |
Statutory federal income tax provision |  | $ | (44,431 | ) |  | $ | (56,914 | ) |  | $ | (34,774 | )
Adjustment for nontaxable income of the REIT |  |  | 38,272 |  |  |  | 48,680 |  |  |  | 34,904 |
State taxes (net of federal tax benefit) |  |  | (1,317 | ) |  |  | (1,705 | ) |  |  | (740 | )
Permanent share-based compensation adjustment |  |  | 1,446 |  |  |  | 1,571 |  |  |  | — |
Other permanent items |  |  | (251 | ) |  |  | (200 | ) |  |  | (165 | )
Federal valuation allowance reversal |  |  | 36,156 |  |  |  | 5,519 |  |  |  | 8,271 |
State valuation allowance reversal (net of federal tax benefit) |  |  | 17,241 |  |  |  | (228 | ) |  |  | (737 | )
Effect of federal tax law change |  |  | 2,030 |  |  |  | — |  |  |  | 5,229 |
Other |  |  | 9 |  |  |  | (123 | ) |  |  | (133 | )
|  | $ | 49,155 |  |  | $ | (3,400 | ) |  | $ | 11,855 |
In 2016, the Company adopted ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting”. Upon adoption, the Company recorded an immaterial one-time adjustment to retained earnings for prior unrecognized excess tax benefits, net of allowance, as shown in the accompanying consolidated statement of stockholders’ equity for the year ended December 31, 2016. Beginning in 2016, any excess tax benefit or tax deficiency from share-based payment vesting or settlement is recorded as part of a permanent share-based compensation adjustment. Significant components of the Company’s deferred tax assets and liabilities at December 31 are as follows (amounts in thousands):
|  | 2017 |  |  | 2016 |
DEFERRED TAX ASSETS: |  |  |  |  |  |  |  |
Accounting reserves and accruals |  | $ | 14,830 |  |  | $ | 20,979 |
Defined benefit plan |  |  | 4,148 |  |  |  | 7,665 |
Deferred management rights proceeds |  |  | 44,651 |  |  |  | 69,317 |
Federal and State net operating loss carryforwards |  |  | 44,789 |  |  |  | 51,615 |
Tax credits and other carryforwards |  |  | 640 |  |  |  | 819 |
Investment in joint ventures |  |  | 317 |  |  |  | 584 |
Other assets |  |  | 4,353 |  |  |  | 6,171 |
Total deferred tax assets |  |  | 113,728 |  |  |  | 157,150 |
Valuation allowance |  |  | (14,616 | ) |  |  | (88,653 | )
Total deferred tax assets, net of valuation allowance |  |  | 99,112 |  |  |  | 68,497 |
DEFERRED TAX LIABILITIES: |  |  |  |  |  |  |  |
Property and equipment, net |  |  | 47,416 |  |  |  | 67,168 |
Goodwill and other intangibles |  |  | 705 |  |  |  | 1,201 |
Other liabilities |  |  | 874 |  |  |  | 1,597 |
Total deferred tax liabilities |  |  | 48,995 |  |  |  | 69,966 |
Net deferred tax assets (liabilities) |  | $ | 50,117 |  |  | $ | (1,469 | )
Federal net operating loss carryforwards at December 31, 2017 totaled $89.1 million, resulting in a deferred tax benefit of $18.7 million, which will begin to expire in 2033. Charitable contribution carryforwards at December 31, 2017 totaled $2.9 million, resulting in a deferred tax benefit of $0.6 million, which will begin to expire in 2018. The use of certain federal net operating losses, credits and other deferred tax assets are limited to the Company’s future taxable earnings. As a result, a valuation allowance has been provided for certain federal deferred tax assets. The valuation allowance related to federal deferred tax assets increased (decreased) $(60.6) million, $0.6 million and $(8.3) million in 2017, 2016 and 2015, respectively. State net operating loss carryforwards at December 31, 2017 totaled $454.6 million, resulting in a deferred tax benefit of $26.1 million, which will expire between 2018 and 2037. The use of certain state net operating losses, credits and other state deferred tax assets are limited to the future taxable earnings of separate legal entities. As a result, a valuation allowance has been provided for certain state deferred tax assets, including loss carryforwards. The valuation allowance related to state deferred tax assets decreased $13.4 million, $0.2 million and $1.8 million in 2017, 2016 and 2015, respectively. The total 2017 decrease in federal and state valuation allowance of $74.0 million differs from the amounts shown in the rate reconciliation of $53.4 million due primarily to the effects of the rate change enacted as a result of the TCJA, which resulted in a reduction in deferred tax assets and liabilities offset by a reduction in the corresponding valuation allowance. Management believes that it is more likely than not that the results of operations will generate sufficient taxable income to realize the deferred tax assets after giving consideration to the valuation allowance. The Company has concluded IRS examinations of the TRS through the 2015 tax year. For federal income tax purposes and substantially all the states with which the Company has nexus, the statute of limitations has expired through 2013. However, the Company has state net operating loss carryforwards from closed years, which could be adjusted upon audit. The Company is routinely subject to other various jurisdictional income tax audits; however, there were no outstanding state or local audits at December 31, 2017. At December 31, 2017 and 2016, the Company had no accruals for unrecognized tax benefits. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. At December 31, 2017 and 2016, the Company has accrued no interest or penalties related to uncertain tax positions.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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