Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Income Tax Expense (Benefit)

Income tax expense (benefit) is comprised of the following (in millions):


	Year Ended December 31,
	2022		2021		2020

Current:
Federal	$	—	$	—	$	(0.2)
State	1.5		1.5		1.9
Deferred:
Federal	17.5		7.9		(22.2)
State	4.3		1.1		0.4
Total income tax expense (benefit)	$	23.3	$	10.5	$	(20.1)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the provision for income taxes as reported in the consolidated statements of operations and the amount of income tax expense (benefit) computed by multiplying consolidated income (loss) in each year by the U.S. federal statutory rate of 21% (2022, 2021 and 2020) follows (in millions):


	Year Ended December 31,
	2022		2021		2020

Tax expense (benefit) at U.S.federal statutory rate	$	23.2	$	17.1	$	(4.0)
State income tax, net of U.S. federal tax benefit	6.0		2.3		2.4
Change in federal valuation allowance	29.1		20.9		4.1
Net income attributable to non-controlling interests	(30.2)		(29.9)		(24.8)
Stock option compensation	(2.5)		(1.7)		1.2
Differences related to divested facilities	(1.4)		(2.6)		(0.7)
Tax return reconciling differences	(1.0)		1.3		—
Change in effective tax rate	(0.5)		—		(0.8)
Tax Receivable Agreement liability	0.4		0.7		0.9
Goodwill impairment	—		—		4.3
Litigation settlement	—		—		(3.7)
Adjustments to unrealized attributes	—		2.3		—
Other	0.2		0.1		1.0
Total income tax expense (benefit)	$	23.3	$	10.5	$	(20.1)

Schedule of Deferred Tax Assets and Liabilities

The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax asset are as follows (in millions):


	December 31,
	2022		2021

Deferred tax assets:
Medical malpractice liability	$	4.1	$	3.6
Accrued vacation and incentive compensation	3.1		3.0
Net operating loss carryforwards	146.0		152.1
Allowance for bad debts	2.9		3.0
Amortization of intangible assets	—		1.2
Deferred financing costs	5.1		8.3
Section 163(j) interest	137.7		99.4
Interest rate derivative liability	10.5		15.0
TRA liability	0.1		0.6
Right of use	52.5		51.1
Software development costs	1.0		—
Other deferred assets	9.2		11.1
Total gross deferred tax assets	372.2		348.4
Less: Valuation allowance	(114.7)		(113.0)
Total deferred tax assets	257.5		235.4
Deferred tax liabilities:
Depreciation on property and equipment	(2.0)		(2.6)
Basis differences of partnerships and joint ventures	(87.4)		(73.0)
Right of use	(44.4)		(44.2)
Amortization of intangible assets	(1.3)		—
Interest rate derivative asset	(29.5)		—
Other deferred liabilities	(1.4)		(1.2)
Total deferred tax liabilities	(166.0)		(121.0)
Net deferred tax assets	$	91.5	$	114.4

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2022 and 2021 is as follows (in millions):


	December 31,
	2022		2021

Unrecognized tax benefits at beginning of year	$	0.1	$	0.1
Additions for tax provisions of current year	—		—
Unrecognized tax benefits at end of year	$	0.1	$	0.1