Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Earnings (loss) before income taxes during the years ended December 31, 2022, 2021 and 2020, was as follows:

	Year Ended December 31,
(millions)	2022		2021		2020
United States	$	65.1	$	44.8	$	(240.1	)
Foreign		0.5		1.0		(0.3	)
Total	$	65.6	$	45.8	$	(240.4	)

The components of income tax expense (benefit) during the years ended December 31, 2022, 2021 and 2020 were as follows:

	Year Ended December 31,
(millions)	2022		2021			2020
Current
U.S. Federal	$	6.9	$	(3.2	)	$	(15.3	)
Foreign		0.3		0.2			0.2
State		2.7		1.0			0.1
Total current		9.9		(2.0	)		(15.0	)
Deferred
U.S. Federal		5.1		9.7			(40.7	)
Foreign		—		0.1			—
State		2.5		2.7			(11.8	)
Total deferred		7.6		12.5			(52.5	)
Income tax expense (benefit)	$	17.5	$	10.5		$	(67.5	)

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for U.S. GAAP purposes and the amount used for income tax purposes.

The components of the Company's deferred tax assets and liabilities as of December 31, 2022 and 2021 were as follows:

	December 31,
(millions)	2022			2021
Deferred tax assets
NOL carry forwards and tax credits	$	20.2		$	23.9
Lease liabilities		59.0			71.7
Accrued expenses		15.7			14.9
Accrued compensation		10.2			9.3
Depreciation		27.6			25.7
Other		0.2			0.3
Total deferred tax assets		132.9			145.8
Valuation allowances		(9.0	)		(10.9	)
Net deferred tax assets		123.9			134.9
Deferred tax liabilities
ROU assets		(43.9	)		(53.7	)
Depreciation and amortization		(13.5	)		(9.4	)
Goodwill		(19.3	)		(16.3	)
Equity investments in unconsolidated entities		(5.1	)		(4.6	)
Other		(0.3	)		(0.3	)
Total deferred tax liabilities		(82.1	)		(84.3	)
Total net deferred tax asset	$	41.8		$	50.6
Amounts per Consolidated Balance Sheets
Deferred tax assets		44.4			50.6
Deferred tax liabilities (included in Other noncurrent liabilities)		(2.6	)		—
Total net deferred tax asset	$	41.8		$	50.6

Changes affecting the valuation allowances on deferred tax assets during the years ended December 31, 2022, 2021 and 2020, were as follows:

	December 31,
(millions)	2022			2021		2020
Beginning Balance	$	10.9		$	10.7	$	8.3
Current year (benefit) expense		(1.9	)		0.2		2.4
Ending Balance	$	9.0		$	10.9	$	10.7

The accounting guidance for income taxes requires the Company to assess the realizability of deferred tax assets at each reporting period. These assessments generally consider several factors including the reversal of existing temporary differences, projected future taxable income and potential tax planning strategies. The Company has valuation allowances of $9.0 million and $10.9 million as of December 31, 2022 and 2021, respectively, primarily related to the Company’s state NOLs, foreign tax credits and state tax credits that the Company believes are not likely to be realized based on its estimates of future foreign and state taxable income, limitations on the uses of its state NOLs and the carryforward life over which the state tax benefit is realized.

The Company has $17.6 million of tax effected state NOLs as of December 31, 2022, which will expire in the years 2023 through 2042. As noted above, the utilization of NOLs of the Company are limited.

A reconciliation of differences between the U.S. Federal statutory income tax rate and the Company's effective income tax rate during the years ended December 31, 2022, 2021 and 2020, was as follows:

	Year Ended December 31,
(percentages)	2022			2021			2020
Tax at statutory rate		21.0	%		21.0	%		21.0	%
Permanent differences		1.3	%		1.4	%		(0.3	)%
State and local income taxes, net of federal benefit		10.0	%		6.8	%		5.8	%
Foreign taxes		0.4	%		0.5	%		(0.1	)%
Federal NOL carryback rate differential		—			(4.4	)%		2.5	%
Noncontrolling interest		(0.9	)%		(1.7	)%		—
Recognition of tax credits		(2.2	)%		(1.0	)%		0.2	%
		29.6	%		22.6	%		29.1	%
Change in valuation allowance		(2.9	)%		0.3	%		(1.0	)%
Effective tax rate		26.7	%		22.9	%		28.1	%

Due to the Coronavirus Aid, Relief, and Economic Security Act in 2020, the Company was able to carry back its 2020 U.S. Federal taxable loss to the 2015 and 2016 tax years, which had a higher corporate tax rate. As a result, based on the Company’s initial estimates as of December 31, 2020, the Company recorded an income tax refund receivable of $15.4 as of December 31, 2020. During the year ended December 31, 2021, the Company finalized its 2020 U.S. Federal income tax return, which resulted in a $5.1 million increase of the income tax refund receivable, of which $2.0 million related to the additional benefit recognized due to the ability to carryback the Company’s 2020 U.S. Federal taxable loss to tax years 2015 and 2016. The $20.5 million income tax refund receivable was included in Prepaid and other current assets within the Consolidated Balance Sheets as of December 31, 2021. The $20.5 million income tax refund was received during the year ended December 31, 2022.

Taxes refunded, net of payments, were $7.1 million during the year ended December 31, 2022. Taxes paid were $0.5 million and $2.4 million during the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2022 and 2021, the Company had not identified any uncertain tax positions that would have a material impact on the Company's financial position.

The Company would recognize potential interest and penalties related to uncertain tax positions, if any, in income tax expense. The tax years that remain subject to examination for the Company's major tax jurisdictions as of December 31, 2022 were as follows:

2019 - 2022	United States - federal income tax
2018 - 2022	United States - state and local income tax
2018 - 2022	Foreign - Canada and Puerto Rico