Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Earnings (loss) before income taxes during the years ended December 31, 2021, 2020 and 2019, was as follows:

	Year Ended December 31,
(millions)	2021		2020			2019
United States	$	44.8	$	(240.1	)	$	69.7
Foreign(1)		1.0		(0.3	)		1.4
Total	$	45.8	$	(240.4	)	$	71.1

(1) Canada and Puerto Rico

The components of income tax expense (benefit) during the years ended December 31, 2021, 2020 and 2019 were as follows:

	Year Ended December 31,
(millions)	2021			2020			2019
Current
U.S. Federal	$	(3.2	)	$	(15.3	)	$	9.6
Foreign(1)		0.2			0.2			0.9
State		1.0			0.1			4.7
Total current		(2.0	)		(15.0	)		15.2
Deferred
U.S. Federal		9.7			(40.7	)		2.9
Foreign(1)		0.1			—			(0.1	)
State		2.7			(11.8	)		1.4
Total deferred		12.5			(52.5	)		4.2
Income tax expense (benefit)	$	10.5		$	(67.5	)	$	19.4

(1) Canada and Puerto Rico

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.

Components of the Company's deferred tax assets and liabilities as of December 31, 2021 and 2020 were as follows:

	December 31,
(millions)	2021			2020
Deferred tax assets
NOL carry forwards and tax credits	$	23.9		$	23.5
Lease liability		71.7			87.9
Accrued expenses		14.9			15.2
Accrued compensation		9.3			8.4
Depreciation		24.6			17.2
Other		1.4			3.4
Total deferred tax assets		145.8			155.6
Valuation allowances		(10.9	)		(10.7	)
Net deferred tax assets		134.9			144.9
Deferred tax liabilities
Prepaid expenses		(0.1	)		(0.2	)
ROU asset		(53.7	)		(62.8	)
Undistributed foreign earnings		(0.2	)		(0.2	)
Depreciation and amortization		(9.4	)		—
Goodwill amortization		(16.3	)		(13.0	)
Equity investments in unconsolidated entities		(4.6	)		(4.9	)
Total deferred tax liabilities		(84.3	)		(81.1	)
Total net deferred tax asset	$	50.6		$	63.8

Changes affecting the valuation allowances on deferred tax assets during the years ended December 2021, 2020, and 2019, were as follows:

	December 31,
(millions)	2021		2020		2019
Beginning Balance	$	10.7	$	8.3	$	8.1
Current year expense		0.2		2.4		0.2
Ending Balance	$	10.9	$	10.7	$	8.3

The accounting guidance for income taxes requires that the Company 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 $10.9 million and $10.7 million as of December 31, 2021 and 2020, 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 $21.2 million of tax effected state NOLs as of December 31, 2021, which will expire in the years 2022 through 2041. As noted above, the utilization of NOLs of the Company are limited.

A reconciliation of the Company's reported income tax provision to the amount computed by multiplying earnings (loss) before income taxes by the statutory United States federal income tax rate for the years ended December 31, 2021, 2020 and 2019, was as follows:

	Year Ended December 31,
(percentages)	2021			2020			2019
Tax at statutory rate		21.0	%		21.0	%		21.0	%
Permanent differences		1.4	%		(0.3	)%		1.1	%
State taxes, net of federal benefit		6.8	%		5.8	%		6.3	%
Effect of foreign tax rates		0.5	%		(0.1	)%		0.8	%
Federal net operating loss carryback rate differential		(4.4	)%		2.5	%		—
Noncontrolling interest		(1.7	)%		—			(0.8	)%
Current year adjustment to deferred taxes		—			—			1.1	%
Recognition of tax credits		(1.0	)%		0.2	%		(2.5	)%
		22.6	%		29.1	%		27.0	%
Change in valuation allowance		0.3	%		(1.0	)%		0.3	%
Effective tax rate		22.9	%		28.1	%		27.3	%

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, which was included in Prepaid and other current assets within the Consolidated Balance Sheets. 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.

Taxes paid were $0.5 million, $2.4 million and $15.3 million in the years ended December 31, 2021, 2020 and 2019, respectively.

The Company has elected the period cost method to account for any tax liability subject to Global Intangible Low Taxes Income (“GILTI”). The GILTI amount recognized during the years ended December 31, 2021 and 2020, was not significant.

As of December 31, 2021 and 2020, 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, 2021 were as follows:

2018 - 2021	United States - federal income tax
2017 - 2021	United States - state and local income tax
2017 - 2021	Foreign - Canada and Puerto Rico