10.

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 certain assets. 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”).

For the three months ended September 30, 2014, the Company recorded a discrete income tax benefit of $0.5 million related to the filing of the Company’s 2013 Federal and state income tax returns. For the nine months ended September 30, 2014, the Company recorded an income tax benefit of $0.4 million, consisting of a discrete benefit of $0.5 million related to the filing of the Company’s 2013 Federal and state income tax returns, partially offset by tax expense of $0.1 million related to the current period operations of the Company. The expense recorded related to current period operations is different from the statutory rate primarily due to the non-taxable income of the REIT, partially offset by additional valuation allowance required at the TRSs.

For the three months ended September 30, 2013, the Company recorded an income tax benefit of $12.5 million, consisting of a tax benefit of $5.4 million related to the current period operations of the Company and a discrete benefit of $7.1 million related to a decrease in deferred tax liabilities associated with the Company’s REIT conversion and the filing of the Company’s 2012 Federal and state income tax returns.

For the nine months ended September 30, 2013, the Company recorded an income tax benefit of $80.5 million. This benefit was primarily due to a benefit of $66.0 million related to the Company’s REIT conversion and a benefit of $6.9 million related to the reversal of liabilities associated with unrecognized tax positions during the nine months ended September 30, 2013, as described below. In addition, the Company recorded an income tax benefit of $1.2 million related to the filing of the Company’s 2012 Federal and state income tax returns and a benefit of $6.4 million related to its current period operations.

As a result of the Company’s conversion to a REIT, certain net deferred tax liabilities related to the real estate of the Company were reversed, as the REIT will generally not pay federal corporate income tax related to those deferred tax liabilities. In addition, the Company assessed the need for a valuation allowance on the net deferred tax assets of the TRSs. As a result, the Company recorded a net benefit of $66.0 million related to the conversion to a REIT in the nine months ended September 30, 2013.

The Internal Revenue Service has completed its examination of the Company’s federal income tax returns for fiscal years 2008, 2009 and 2010. As a result, issues related to 2010 and earlier years have been effectively settled. The Company has not been notified of any other federal or state audits. Due to the favorable resolution of the federal examination, the Company’s reserve for unrecognized tax benefits decreased by $12.4 million during the nine months ended September 30, 2013, of which $4.8 million was recorded as an income tax benefit. In addition, the Company recorded a reduction to the related accrued interest of $2.1 million as an income tax benefit in the nine months ended September 30, 2013.

At September 30, 2014 and December 31, 2013, the Company had no unrecognized tax benefits.