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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Taxes [Abstract] |
Income Taxes | 17. Income Taxes The benefit (provision) for income taxes is comprised of the following (dollars in thousands):
|  | For the Years Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Federal: |  |  |  |  |  |  |  |  |
Current |  | $ | 1,367 |  |  | $ | (312 | ) |  | $ | 193 |
Deferred |  |  | 182,371 |  |  |  | 183 |  |  |  | 347 |
Total Federal |  |  | 183,738 |  |  |  | (129 | ) |  |  | 540 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (2,433 | ) |  |  | (1,627 | ) |  |  | (2,059 | )
Deferred (included in Federal above) |  |  | — |  |  |  | — |  |  |  | — |
Total State |  |  | (2,433 | ) |  |  | (1,627 | ) |  |  | (2,059 | )
Total |  | $ | 181,305 |  |  | $ | (1,756 | ) |  | $ | (1,519 | )
A reconciliation of the benefit (provision) for income taxes to the amount computed at the U.S. Federal statutory rate of 35% is as follows (dollars in thousands):
|  | For the Years Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Tax benefit at U.S. statutory rate |  | $ | 115,756 |  |  | $ | 640 |  |  | $ | 22,945 |
Valuation allowance |  |  | 64,155 |  |  |  | (7,097 | ) |  |  | (24,138 | )
State taxes, net of federal income tax |  |  | 11,582 |  |  |  | (985 | ) |  |  | 1,258 |
Unrecognized tax benefits |  |  | 822 |  |  |  | (3 | ) |  |  | 193 |
Return to provision |  |  | 716 |  |  |  | (2,568 | ) |  |  | (225 | )
Non-deductible transaction costs |  |  | (6,870 | ) |  |  | — |  |  |  | — |
Tax credits |  |  | (2,222 | ) |  |  | 9,757 |  |  |  | — |
Meals and entertainment |  |  | (946 | ) |  |  | (496 | ) |  |  | (486 | )
Tax rate changes |  |  | (718 | ) |  |  | — |  |  |  | — |
Officers compensation |  |  | (751 | ) |  |  | (724 | ) |  |  | (922 | )
Other, net |  |  | (118 | ) |  |  | (65 | ) |  |  | 122 |
Lobbying and political |  |  | (101 | ) |  |  | (89 | ) |  |  | — |
Expired charitable contribution |  |  | — |  |  |  | (126 | ) |  |  | — |
Loss on acquisition |  |  | — |  |  |  | — |  |  |  | (266 | )
Total |  | $ | 181,305 |  |  | $ | (1,756 | ) |  | $ | (1,519 | )
Significant components of the Company's deferred tax assets and liabilities at December 31 are as follows (dollars in thousands):
|  | 2014 |  |  | 2013 |
Deferred income tax assets: |  |  |  |  |  |
Capital and financing lease obligations |  | $ | 945,000 |  |  | $ | 39,748 |
Operating loss carryforwards |  |  | 227,956 |  |  |  | 150,755 |
Accrued expenses |  |  | 146,536 |  |  |  | 54,400 |
Deferred lease liability |  |  | 77,790 |  |  |  | 49,864 |
Tax credits |  |  | 34,860 |  |  |  | 32,673 |
Intangible assets |  |  | 17,785 |  |  |  | — |
Deferred gain on sale leaseback |  |  | 7,073 |  |  |  | 8,673 |
Prepaid revenue |  |  | 5,835 |  |  |  | 53,228 |
Total gross deferred income tax asset |  |  | 1,462,835 |  |  |  | 389,341 |
Valuation allowance |  |  | (9,213 | ) |  |  | (72,366 | )
Net deferred income tax assets |  |  | 1,453,622 |  |  |  | 316,975 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (1,556,603 | ) |  |  | (374,431 | )
Investment in unconsolidated ventures |  |  | (54,113 | ) |  |  | — |
Other |  |  | (2,181 | ) |  |  | (6,200 | )
Total gross deferred income tax liability |  |  | (1,612,897 | ) |  |  | (380,631 | )
Net deferred tax liability |  | $ | (159,275 | ) |  | $ | (63,656 | )
A reconciliation of the net deferred tax liability to the consolidated balance sheets at December 31 is as follows (dollars in thousands):
|  | 2014 |  |  | 2013 |
Deferred tax asset – current |  | $ | 84,199 |  |  | $ | 17,643 |
Deferred tax liability – noncurrent |  |  | (243,474 | ) |  |  | (81,299 | )
Net deferred tax liability |  | $ | (159,275 | ) |  | $ | (63,656 | )
As of December 31, 2014 and 2013, the Company had federal net operating loss carryforwards of approximately $766.9 million and $427.4 million, respectively, which are available to offset future taxable income through 2034. As a result of the acquisition of Emeritus on July 31, 2014, the Company recorded deferred tax liabilities in excess of deferred tax assets that reflect the difference between the fair market value of the acquired assets over the historical basis of the acquired assets. The Company determined that it is more likely than not that its' federal net operating losses, the majority of state net operating losses, and the majority of its' tax credits will be utilized in the future, based on the future reversal of these deferred tax liabilities. As a result, during the year ended December 31, 2014 the Company recorded an aggregate deferred federal, state and local income tax benefit of $64.2 million from the release of the valuation allowance against certain deferred tax assets. Additionally, the Company recorded an aggregate deferred federal, state and local tax benefit of $94.1 million as a result of the operating loss for the year ended December 31, 2014. The Company has recorded valuation allowances of $7.5 million and $7.0 million at December 31, 2014 and 2013, respectively, against its state net operating losses, as the Company anticipates these losses will not be utilized prior to expiration. The carryforward period for some states is considerably shorter than the period which is allowed for federal purposes. The Company also recorded a valuation allowance against federal and state credits of $1.8 million and $20.6 million as of December 31, 2014 and 2013, respectively. As of December 31, 2014 and 2013, the Company had $112.6 million and $53.5 million, respectively, included in its net operating loss carryforward relating to restricted stock grants. Under ASC 718-10, this loss will be recorded in additional paid-in capital in the period in which the loss is effectively used to reduce taxes payable. The formation of the Company, the reorganization of a predecessor company and the acquisitions of several wholly-owned subsidiaries constituted ownership changes under Section 382 of the Internal Revenue Code, as amended. As a result, the Company's ability to utilize the net operating loss carryforward to offset future taxable income is subject to certain limitations and restrictions. Furthermore, the Company had an ownership change under Section 382 in May 2010 which resulted in an additional annual limitation to the utilization of the net operating loss in the amount of $92.0 million. The acquisition of Emeritus on July 31, 2014 resulted in an ownership change for Emeritus resulting in an annual limitation of $53.9 million on net operating losses acquired by the Company from Emeritus. The Company expects the net operating loss to be fully released before expiration and therefore does not anticipate a financial statement impact as a result of the limitation. At December 31, 2014, the Company had gross tax affected unrecognized tax benefits of $30.2 million, which, if recognized, would result in an income tax benefit in accordance with ASC 805. Interest and penalties related to these tax positions are classified as tax expense in the Company's consolidated financial statements. Total interest and penalties reserved is $0.5 million at December 31, 2014. Tax returns for years 2011 through 2013 are subject to future examination by tax authorities. In addition, the net operating losses from prior years are subject to adjustment under examination. The Company does not expect that unrecognized tax benefits for tax positions taken with respect to 2014 and prior years will significantly change in 2015. A reconciliation of the unrecognized tax benefits for the year 2014 is as follows (dollars in thousands):
Balance at January 1, 2014 |  | $ | 1,556 |
Additions for tax positions taken by Emeritus |  |  | 29,664 |
Additions for tax positions related to the current year |  |  | — |
Additions for tax positions related to prior years |  |  | 9 |
Reductions for tax positions related to prior years |  |  | (1,034 | )
Balance at December 31, 2014 |  | $ | 30,195 |
On September 13, 2013, Treasury and the Internal Revenue Service issued final regulations regarding the deduction and capitalization of expenditures related to tangible property. The final regulations under Internal Revenue Code Sections 162, 167 and 263(a) apply to amounts paid to acquire, produce, or improve tangible property as well as dispositions of such property and are generally effective for tax years beginning on or after January 1, 2014. The Company has evaluated these regulations and determined they will not have a material impact on the Company's consolidated results of operations, cash flows or financial position.

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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 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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