Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. INCOME TAXES

For the years ended December 31, 2022, 2021 and 2020, the provision for (benefit from) income taxes is comprised of the following:

	2022			2021			2020
Current income tax provision	(In thousands)
Federal	$	(31	)	$	(31	)	$	(136	)
State		3,427			3,984			1,020
Foreign		—			—			5
Total current income tax provision		3,396			3,953			889
Deferred income tax provision (benefit):
Federal		71,642			345			(19,718	)
State		23,845			(4,462	)		(11,696	)
Total deferred income tax provision (benefit)		95,487			(4,117	)		(31,414	)
Total income tax provision (benefit)	$	98,883		$	(164	)	$	(30,525	)

The deferred income tax provision (benefit) represents the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Cash paid for income taxes totaled $1.6 million, $5.9 million and $0.5 million, for the years ended December 31, 2022, 2021 and 2020, respectively.

The components of deferred income tax assets and liabilities as of December 31, 2022 and 2021 are as follows:

	2022			2021
Deferred income tax assets:	(In thousands)
Acquisition and debt related costs	$	3,270		$	4,292
Net operating losses		156,176			199,656
Goodwill impairment		53,684			53,677
Self-insurance		8,816			7,220
Deferred revenue		2,520			2,878
Restricted stock		7,911			9,509
Tax credits		11,847			10,718
Legal settlements		—			855
Lease obligations		29,117			29,410
Interest limitation		10,120			562
Charitable contributions		2,122			3,243
Other		5,220			6,115
Total deferred income tax assets		290,803			328,135
Valuation allowance		(4,601	)		(4,775	)
Net deferred tax assets		286,202			323,360
Deferred income tax liabilities:
Property and equipment		(245,396	)		(194,739	)
Amortization - Goodwill		(60,230	)		(55,827	)
Amortization - Other intangibles		(35,666	)		(29,482	)
Right of use assets		(28,568	)		(29,004	)
Other		(637	)		(3,116	)
Total deferred income tax liabilities		(370,497	)		(312,168	)
Net deferred income tax (liabilities) assets	$	(84,295	)	$	11,192

The Company files federal, state and provincial income tax returns in various jurisdictions with varying statute of limitation expiration dates. Under the tax statute of limitations applicable to the Internal Revenue Code of 1986, as amended (the “Code”), the Company is no longer subject to U.S. federal income tax examinations by the Internal Revenue Service for years before 2018. However, because the Company is carrying forward income tax attributes, such as net operating losses and tax credits from 2009 and subsequent years, these attributes can still be audited when utilized on returns filed in the future. The Company has determined that there are no positions currently taken that would rise to a level requiring an amount to be recorded or disclosed as an unrecognized tax benefit. If such positions do arise, it is the Company’s intent that any interest or penalty amount related to such positions will be recorded as a component of the income tax provision in the applicable period.

The Company has federal tax net operating loss carryforwards of approximately $627.5 million as of December 31, 2022 and state net operating loss carryforwards spread across various jurisdictions with a combined total of approximately $634.5 million as of December 31, 2022. These net operating loss carryforwards, if not used to reduce taxable income in future periods, will begin to expire in 2030 and 2029, for federal and state tax purposes, respectively.

Realization of the deferred income tax assets, primarily arising from these net operating loss carryforwards and charitable contribution carryforwards, is dependent upon generating sufficient taxable income prior to expiration of the carryforwards, which may include the reversal of deferred tax liability components.

Through December 31, 2020, approximately $65.6 million of valuation allowances were established for some of the Company's deferred tax assets, which, based on its analysis at the time, the Company believed did not meet the “more likely than not” criteria and would expire before being realized in future periods. Based on the Company's assessment of the realizability of its deferred tax assets during the year ended December 31, 2021, which included a review of current and forecasted financial performance as the Company was in a cumulative pretax income position, the Company believed that some of these deferred tax assets met the “more likely than not” criteria and will be realized in future periods before they expire. As a result, the Company reversed its valuation allowances by approximately $60.8 million during the year ended December 31, 2021.

As of December 31, 2021, the Company had a valuation allowance of approximately $4.8 million, net of federal tax benefit, on the Company’s deferred tax assets relating to state net operating losses, which, the Company believed did not meet the “more likely than not” criteria and would expire before being realized in future periods. As of December 31, 2022, the Company has a valuation allowance of approximately $4.6 million, net of federal tax benefit, on the deferred tax assets related to state net operating loss carryforwards. The Company’s valuation allowances, in part, rely on estimates and assumptions related to future financial performance. Given the macroeconomic environment related to the COVID-19 pandemic and the uncertainties regarding the related impact on financial performance, the Company’s valuation allowances may need to be adjusted in the future.

The Inflation Reduction Act (“IRA”) of 2022 was signed into law on August 16, 2022. This legislation includes a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases among its key tax provisions effective for years beginning after December 31, 2022. The Company is continuing to evaluate the existing guidance but does not anticipate a material impact for either of these provisions. The Company will continue to evaluate the impact of the IRA as additional information becomes available.

The reconciliation between the statutory income tax rate and the Company’s effective income tax provision (benefit) rate for the years ended December 31, 2022, 2021 and 2020, is as follows:

	2022							2021							2020
	Amount			%				Amount			%				Amount			%
	(In thousands)
Income tax at federal statutory rates	$	81,915			21.00		%	$	53,833			21.00		%	$	(71,998	)		21.00		%
State taxes, net of federal benefit		17,103			4.38				12,070			4.71				(15,816	)		4.61
Equity-based compensation		(9,839	)		(2.52	)			(8,051	)		(3.14	)			(485	)		0.14
Tax credits		(205	)		(0.05	)			(137	)		(0.05	)			(304	)		0.09
Impact of state rate changes		4,460			1.14				(753	)		(0.29	)			(3,906	)		1.14
Officer's compensation limitation		4,612			1.18				3,437			1.34				95			(0.03	)
Valuation allowance - state		—			—				(13,756	)		(5.37	)			10,450			(3.05	)
Valuation allowance - federal		—			—				(47,061	)		(18.36	)			49,951			(14.57	)
Other		837			0.22				254			0.10				1,488			(0.43	)
Income tax provision (benefit)	$	98,883			25.35		%	$	(164	)		(0.06	)	%	$	(30,525	)		8.90		%