XML 25 R13.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

Note 8. Income Taxes

For the three months ended March 31, 2016, the Company recorded no income tax expense or benefit because property impairments recorded during the year ended December 31, 2015 reduced the book value of the Company’s properties below their tax basis requiring the Company to record a net deferred tax asset.  Because the future realization of this deferred tax asset could not be assured, the Company recorded a 100% valuation allowance against its deferred tax asset. The pre-tax loss recorded for the three months ended March 31, 2016, increased the Company’s net deferred tax asset but did not result in a recognized tax benefit because the realization of the Company’s net tax asset still cannot be assured, therefore the valuation allowance also was increased and offset the tax benefit that would have resulted from the net operating loss. For the three month period ended March 31, 2015, the Company recorded an income tax benefit of $0.6 million. The effective tax rate was 34.4% which included approximately 0.4% of the estimated portion of the Company’s income subject to income tax in the states in which the Company operates.

The Company provides for deferred income taxes on the difference between the tax basis of an asset or liability and its carrying amount in the Condensed Consolidated Financial Statements in accordance with FASB ASC Topic 740, Income Taxes. This difference will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. In recording deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax asset will be realized. The ultimate realization of deferred income tax assets, if any, is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.