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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Taxes [Abstract] |
Income Taxes | 15. Income Taxes The benefit (provision) for income taxes is comprised of the following (dollars in thousands):
|  | For the Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal: |  |  |  |  |  |  |  |  |
Current |  | $ | (12 | ) |  | $ | 49 |  |  | $ | 1,367 |
Deferred |  |  | (3,248 | ) |  |  | 95,259 |  |  |  | 182,371 |
Total Federal |  |  | (3,260 | ) |  |  | 95,308 |  |  |  | 183,738 |
State: |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | (2,118 | ) |  |  | (3,099 | ) |  |  | (2,433 | )
Deferred (included in Federal above) |  |  | — |  |  |  | — |  |  |  | — |
Total State |  |  | (2,118 | ) |  |  | (3,099 | ) |  |  | (2,433 | )
Total |  | $ | (5,378 | ) |  | $ | 92,209 |  |  | $ | 181,305 |
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, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Tax benefit at U.S. statutory rate |  | $ | 139,657 |  |  | $ | 192,390 |  |  | $ | 115,603 |
State taxes, net of federal income tax |  |  | 11,788 |  |  |  | 18,323 |  |  |  | 11,582 |
Tax credits |  |  | 6,163 |  |  |  | 3,937 |  |  |  | (2,222 | )
Valuation allowance |  |  | (142,862 | ) |  |  | (111,797 | ) |  |  | 64,155 |
Goodwill impairment |  |  | (10,789 | ) |  |  | (7,856 | ) |  |  | — |
Stock compensation |  |  | (5,716 | ) |  |  | — |  |  |  | — |
Other, net |  |  | (1,831 | ) |  |  | (1,626 | ) |  |  | (713 | )
Return to provision |  |  | (920 | ) |  |  | (72 | ) |  |  | 716 |
Meals and entertainment |  |  | (868 | ) |  |  | (1,090 | ) |  |  | (946 | )
Non-deductible transaction costs |  |  | — |  |  |  | — |  |  |  | (6,870 | )
Total |  | $ | (5,378 | ) |  | $ | 92,209 |  |  | $ | 181,305 |
Significant components of the Company's deferred tax assets and liabilities at December 31 are as follows (dollars in thousands):
|  | 2016 |  |  | 2015 |
Deferred income tax assets: |  |  |  |  |  |
Capital and financing lease obligations |  | $ | 862,038 |  |  | $ | 872,002 |
Operating loss carryforwards |  |  | 319,948 |  |  |  | 282,075 |
Accrued expenses |  |  | 109,283 |  |  |  | 144,691 |
Deferred lease liability |  |  | 93,358 |  |  |  | 94,105 |
Tax credits |  |  | 49,550 |  |  |  | 40,974 |
Intangible assets |  |  | 20,272 |  |  |  | 22,522 |
Deferred gain on sale leaseback |  |  | 4,233 |  |  |  | 5,661 |
Prepaid revenue |  |  | 2,626 |  |  |  | 2,415 |
Total gross deferred income tax asset |  |  | 1,461,308 |  |  |  | 1,464,445 |
Valuation allowance |  |  | (264,305 | ) |  |  | (121,602 | )
Net deferred income tax assets |  |  | 1,197,003 |  |  |  | 1,342,843 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Property, plant and equipment |  |  | (1,209,595 | ) |  |  | (1,320,423 | )
Investment in unconsolidated ventures |  |  | (66,678 | ) |  |  | (88,798 | )
Other |  |  | (1,376 | ) |  |  | (2,673 | )
Total gross deferred income tax liability |  |  | (1,277,649 | ) |  |  | (1,411,894 | )
Net deferred tax liability |  | $ | (80,646 | ) |  | $ | (69,051 | )
As of December 31, 2016 and 2015, the Company had federal net operating loss carryforwards of approximately $1.033 billion and $930.4 million, respectively, which are available to offset future taxable income through 2036. The Company determined that a valuation allowance was required due to the loss before income taxes in 2016, and in consideration of the Company's estimated future reversal of existing timing differences as of December 31, 2016. In 2016, the Company recorded a provision of approximately $142.9 million to reflect the necessary valuation allowance of $264.3 million as of December 31, 2016. The valuation allowance reflects that the Company's net operating losses will begin to expire in 2027. As described in Note 4 to the consolidated financial statements, it is expected that the transactions related to the Blackstone Venture may require the Company to record a significant increase to the Company's existing valuation allowance. During 2015, the Company determined that a valuation allowance was required due to the loss before income taxes in 2015, combined with the Company's estimated reversal of future timing differences as of December 31, 2015. As a result, the Company has a valuation allowance of $121.6 million as of December 31, 2015. The valuation allowance reflects that our net operating losses will begin to expire in 2027, however, the Company would anticipate using tax planning strategies available to it in order to avoid a true expiration of those losses, should that issue arise. If the Company continues its trend of increasing losses before income taxes, the valuation allowance may be increased in future periods. 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. During the year ended December 31, 2014, the Company determined that it was more likely than not that its federal net operating loss carryforwards and a majority of its state net operating loss carryforwards, 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 $218.1 million and $89.5 million at December 31, 2016 and 2015, respectively, against its federal and state net operating losses, as the Company anticipates these losses will not be utilized prior to expiration. The Company also recorded a valuation allowance against federal and state credits of $46.2 million and $32.1 million as of December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, the Company had $126.7 million, 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 $92.8 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 losses of the Company from prior to May 2010 and of Emeritus to be fully released before expiration and therefore does not anticipate a financial statement impact as a result of the limitations. At December 31, 2016, the Company had gross tax affected unrecognized tax benefits of $29.1 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 $0.1 million at December 31, 2016. Tax returns for years 2012 through 2015 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 2016 and prior years will significantly change in 2017. A reconciliation of the unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows (dollars in thousands):
|  | For the Years Ended December 31, |
|  | 2016 |  |  | 2015 |
Balance at January 1, |  | $ | 30,236 |  |  | $ | 30,195 |
Additions for tax positions related to the current year |  |  | — |  |  |  | — |
Additions for tax positions related to prior years |  |  | 30 |  |  |  | 50 |
Reductions for tax positions related to prior years |  |  | (1,106 | ) |  |  | (9 | )
Balance at December 31, |  | $ | 29,160 |  |  | $ | 30,236 |
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, 2015. 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 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 2: 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 Reference 3: 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 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 + Details
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