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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The benefit (provision) for income taxes is comprised of the following:
| For the Years Ended December 31,
(in thousands) | 2017 |  | 2016 |  | 2015
Federal: |  |  |  |  |
Current | $ | 2,200 |  |  | $ | (12 | ) |  | $ | 49 |
Deferred | 15,310 |  |  | (3,248 | ) |  | 95,259 |
Total Federal | 17,510 |  |  | (3,260 | ) |  | 95,308 |
State: |  |  |  |  |  |  |  |
Current | (995 | ) |  | (2,118 | ) |  | (3,099 | )
Deferred (included in Federal above) | — |  |  | — |  |  | — |
Total State | (995 | ) |  | (2,118 | ) |  | (3,099 | )
Total | $ | 16,515 |  |  | $ | (5,378 | ) |  | $ | 92,209 |
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:
| For the Years Ended December 31,
(in thousands) | 2017 |  | 2016 |  | 2015
Tax benefit at U.S. statutory rate | $ | 205,777 |  |  | $ | 139,657 |  |  | $ | 192,390 |
Impact of the Tax Act | 114,716 |  |  | — |  |  | — |
State taxes, net of federal income tax | 24,891 |  |  | 11,788 |  |  | 18,323 |
Tax credits | 1,908 |  |  | 6,163 |  |  | 3,937 |
Valuation allowance | (246,037 | ) |  | (142,862 | ) |  | (111,797 | )
Goodwill impairment | (78,515 | ) |  | (10,789 | ) |  | (7,856 | )
Stock compensation | (4,093 | ) |  | (5,716 | ) |  | — |
Other, net | (851 | ) |  | (1,831 | ) |  | (1,626 | )
Meals and entertainment | (726 | ) |  | (868 | ) |  | (1,090 | )
Return to provision | (555 | ) |  | (920 | ) |  | (72 | )
Total | $ | 16,515 |  |  | $ | (5,378 | ) |  | $ | 92,209 |
Significant components of the Company's deferred tax assets and liabilities are as follows:
| As of December 31,
(in thousands) | 2017 |  | 2016
Deferred income tax assets: |  |  |
Capital and financing lease obligations | $ | 264,255 |  |  | $ | 862,038 |
Operating loss carryforwards | 288,469 |  |  | 319,948 |
Accrued expenses | 66,123 |  |  | 109,283 |
Deferred lease liability | 52,869 |  |  | 93,358 |
Tax credits | 49,556 |  |  | 49,550 |
Intangible assets | 14,493 |  |  | 20,272 |
Deferred gain on sale leaseback | 1,844 |  |  | 4,233 |
Prepaid revenue | 1,825 |  |  | 2,626 |
Investment in unconsolidated ventures | 2,861 |  |  | — |
Other | 660 |  |  | — |
Total gross deferred income tax asset | 742,955 |  |  | 1,461,308 |
Valuation allowance | (336,087 | ) |  | (264,305 | )
Net deferred income tax assets | 406,868 |  |  | 1,197,003 |
Deferred income tax liabilities: |  |  |  |  |
Property, plant and equipment | (477,512 | ) |  | (1,209,595 | )
Investment in unconsolidated ventures | — |  |  | (66,678 | )
Other | — |  |  | (1,376 | )
Total gross deferred income tax liability | (477,512 | ) |  | (1,277,649 | )
Net deferred tax liability | $ | (70,644 | ) |  | $ | (80,646 | )
On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act (“Tax Act”), a bill reforming the US corporate income tax code which will reduce the Company’s federal corporate tax rate from 35% to 21%. The rate reduction will take effect on January 1, 2018. For accounting purposes, however, the carrying value of the Company's deferred tax assets is determined by the enacted federal corporate income tax rate. Consequently, the changes in the federal corporate income tax rate have impacted the carrying value of the Company's net deferred tax liability position as of December 31, 2017 as such date is subsequent to the enactment date. Under the new corporate income tax rate of 21%, the Company's net deferred income tax assets and valuation allowance have decreased. In addition to the impact of the federal corporate income tax rate, the change in corporate tax law reduces the Company's valuation allowance and reduces its deferred tax assets related to Alternative Minimum Tax ("AMT") credits to cash or future receivable. Under the Tax Act, AMT is eliminated for corporations and AMT credits can be monetized thereafter. The overall net effect of the Tax Act on the Company's consolidated financial statements was a benefit of $114.7 million for the year ended December 31, 2017. A summary of the effect of the Tax Act is as follows:
| For the Year Ended
(in thousands) | December 31, 2017
Rate change - decrease in net deferred tax assets | $ | 108,070 |
Rate change - decrease in valuation allowance | (172,235 | )
Impact on net operating loss usage | (50,551 | )
Reduction of deferred tax asset - AMT credits | 2,361 |
Total impact of the Tax Act on the Company's deferred taxes position | (112,355 | )
Realization of AMT credits | (2,361 | )
Net impact of the Tax Act on the Company's effect tax rate | $ | (114,716 | )
In addition to the aforementioned impacts to the Company's consolidated financial statements as of December 31, 2017, the Tax Act will have other impacts on the Company in the future. The Company's federal net operating losses that have been incurred prior to December 31, 2017 will continue to have a 20-year carryforward limitation applied and will need to be evaluated for recoverability in the future as such. For net operating losses created after December 31, 2017, the net operating losses will have an indefinite life, but usage will be limited to 80% of taxable income in any given year. The Company has estimated the impact of the Tax Act on state income taxes reflected in its income tax benefit for the year ended December 31, 2017. Reasonable estimates for the Company’s state and local provision were made based on the Company's analysis of tax reform. These provisional amounts may be adjusted in future periods during 2018 when additional information is obtained. Additional information that may affect the Company's provisional amounts would include further clarification and guidance on how the Internal Revenue Service will implement tax reform and further clarification and guidance on how state taxing authorities will implement tax reform and the related effect on our state and local income tax returns, state and local net operating losses and corresponding valuation allowances. As of December 31, 2017 and 2016, the Company had federal net operating loss carryforwards of approximately $1.2 billion and $1.0 billion, respectively, which are available to offset future taxable income through 2037. The Company determined that a valuation allowance was required after consideration of the Company's estimated future reversal of existing timing differences as of December 31, 2017 and 2016. For the year ended December 31, 2017, the Company recorded a provision of approximately $71.8 million (including the impact from Tax Act) to reflect the required valuation allowance of $336.1 million as of December 31, 2017. The valuation allowance reflects that the Company's net operating losses will begin to expire in 2024. A summary of the change in the Company's valuation allowance is as follows:
| For the Year Ended
(in thousands) | December 31, 2017
Increase in valuation allowance before consideration of the Tax Act | $ | 246,037 |
Increase due to the adoption of ASU 2016-09 | 48,531 |
Total increase in valuation allowance | 294,568 |
Tax Act rate change - decrease in valuation allowance | (172,235 | )
Impact on net operating loss usage | (50,551 | )
Total decrease in valuation allowance due to Tax Act | (222,786 | )
Total increase in valuation allowance | $ | 71,782 |
For the year ended December 31, 2016, the Company determined that a valuation allowance was required due to the loss before income taxes, combined with the Company's estimated reversal of future timing differences as of December 31, 2016. As a result, the Company recorded a valuation allowance of $264.3 million as of December 31, 2016. The Company has recorded valuation allowances of $286.6 million and $218.1 million as of December 31, 2017 and 2016, 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 $49.5 million and $49.6 million as of December 31, 2017 and 2016, respectively. As of December 31, 2017 and 2016, the Company had gross tax affected unrecognized tax benefits of $18.5 million and $29.1 million, respectively, which, if recognized, would result in an income tax benefit recorded in the consolidated statement of operations. 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 as of December 31, 2017 and 2016. As of December 31, 2017, the Company's tax returns for years 2013 through 2016 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 2017 and prior years will significantly change in 2018. A reconciliation of the unrecognized tax benefits is as follows:
| For the Years Ended December 31,
(in thousands) | 2017 |  | 2016
Balance at January 1, | $ | 29,160 |  |  | $ | 30,236 |
Additions for tax positions related to the current year | 184 |  |  | — |
Additions for tax positions related to prior years | — |  |  | 30 |
Reductions for the Impact of the Tax Act | (10,859 | ) |  | — |
Reductions for tax positions related to prior years | (24 | ) |  | (1,106 | )
Balance at December 31, | $ | 18,461 |  |  | $ | 29,160 |

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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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