INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income taxes attributable to continuing operations consist of the following (amounts in millions):


	For the Years Ended December 31,
	2023		2022		2021
Current income tax expense:
Federal	$	21.1	$	12.2	$	20.3
State and local	8.8		7.0		5.2
	29.9		19.2		25.5
Deferred income tax expense:
Federal	17.5		20.4		35.9
State and local	3.2		2.9		8.7
	20.7		23.3		44.6
Income tax expense	$	50.6	$	42.5	$	70.1

Total income tax expense for the years ended December 31, 2023, 2022 and 2021 was allocated as follows (amounts in millions):


	For the Years Ended December 31,
	2023		2022		2021
Income from continuing operations	$	50.6	$	42.5	$	70.1
Interest expense	—		(0.7)		0.1
Goodwill	(0.3)		(2.7)		3.1
Tax expense recorded to additional paid-in capital	(0.2)		1.5		—
Total	$	50.1	$	40.6	$	73.3

Schedule of Sources of Tax Effects

A reconciliation of significant differences between the reported amount of income tax expense and the expected amount of income tax expense that would result from applying the U.S. federal statutory income tax rate of 21% to income before income taxes is as follows:


	For the Years Ended December 31,
	2023(1)		2022		2021
Income tax expense at U.S. federal statutory rate	21.0	%	21.0	%	21.0	%
State and local income taxes, net of federal income tax benefit	26.0		5.6		5.0
Excess tax benefits from share-based compensation	3.4		0.3		(2.1)
Non-deductible executive compensation	5.5		0.8		1.2
Unrecognized tax benefits(2)	—		(1.7)		—
Merger-related expenses	13.7		—		—
Merger termination fee	56.2		—		—
Other items, net(3)	1.9		0.5		(0.1)
Income tax expense	127.7	%	26.5	%	25.0	%

(1)The information provided for the year ended December 31, 2023 does not provide a meaningful reconciliation of the effective tax rate and is not comparable to other periods. The effective tax rate for the year is influenced by the relationship of the amount of “effective tax rate drivers” (i.e. non-deductible expenses, non-taxable income, tax credits, valuation allowance, uncertain tax positions, etc.) to income or loss before taxes. For the year ended December 31, 2023, the company incurred merger related expenses totaling $36.7 million and a $106.0 million merger termination fee, which are significant and unusual reductions to income before taxes and “effective tax rate drivers.” Consequently, for 2023, the relationship between the “effective tax rate drivers” and income before taxes is distorted, resulting in an unusual effective tax rate.

(2)For the year ended December 31, 2022, the Company recognized $2.7 million of federal uncertain tax positions due to a lapse of the statute of limitations.

(3)Includes various items such as non-deductible expenses, non-taxable income, tax credits, valuation allowance, uncertain tax positions and return-to-accrual adjustments.

Schedule of Net Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) consist of the following components (amounts in millions):


	As of December 31,
	2023		2022
Deferred tax assets:
Accrued payroll and employee benefits	$	17.1	$	14.1
Workers’ compensation	10.9		10.6
Share-based compensation	7.1		5.7
Legal and compliance matters	3.9		4.7
Lease liability	25.6		27.8
Net operating loss carryforwards	8.9		11.6
Tax credit carryforwards	2.7		2.9
Other assets	0.2		0.2
Gross deferred tax assets	76.4		77.6
Less: valuation allowance	(5.4)		(5.2)
Net deferred tax assets	71.0		72.4
Deferred tax liabilities:
Property and equipment(1)	(13.5)		(6.6)
Amortization of intangible assets	(61.7)		(48.5)
Investment in partnerships	(10.8)		(10.0)
Right of use asset	(24.9)		(27.0)
Other liabilities	(0.7)		(0.7)
Gross deferred tax liabilities	(111.6)		(92.8)
Deferred income taxes	$	(40.6)	$	(20.4)

(1)Effective January 1, 2023, the classification of fleet leases changed from operating leases to finance leases for both GAAP and tax purposes. As a result, for GAAP purposes, the Company recorded the expenses associated with the fleet leases in depreciation expense and interest expense. For tax purposes, the Company accelerated the depreciation expense through bonus depreciation. As a result of accelerated tax depreciation on the fleet vehicles, a deferred tax liability of $8.1 million was recorded for the year ended December 31, 2023.

Schedule of Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (amounts in millions):


	For the Years Ended December 31,
	2023		2022		2021
Balance at beginning of period	$	—	$	2.7	$	2.7
Additions for tax positions related to current year	—		—		—
Additions for tax positions related to prior year	—		—		—
Reductions for tax positions related to prior years	—		—		—
Lapse of statute of limitations	—		(2.7)		—
Settlements	—		—		—
Balance at end of period	$	—	$	—	$	2.7