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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes for the periods indicated were as follows (in millions):
For the Years Ended December 31,
202120202019
Domestic
$414.1 $435.9 $452.2 
Foreign
16.0 (10.7)58.7 
Total
$430.1 $425.2 $510.9 
The provision for income taxes for the periods indicated were as follows (in millions):
For the Years Ended December 31,
202120202019
Current:
Federal$36.9 $70.6 $77.4 
Foreign1.5 2.1 6.2 
State and local9.0 22.6 15.6 
$47.4 $95.3 $99.2 
Deferred:
Federal$37.0 $14.8 $22.4 
Foreign(0.1)(9.8)(2.8)
State and local15.0 2.2 (2.0)
$51.9 $7.2 $17.6 
Provision for income taxes$99.3 $102.5 $116.8 
The tax effects of significant items comprising the Company’s net deferred tax liability as of the dates indicated were as follows (in millions):
December 31,
20212020
Deferred tax assets:
Accrued insurance$42.2 $31.1 
Operating loss carryforwards and tax credits80.7 82.1 
Compensation and benefits36.1 32.8 
Bad debt1.6 3.7 
Other15.4 12.3 
Valuation allowance(54.2)(45.8)
Total deferred tax assets
$121.8 $116.2 
Deferred tax liabilities:
Property and equipment$310.1 $205.0 
Goodwill77.9 58.7 
Other intangible assets58.7 30.7 
Gain on remeasurement of equity investee7.2 7.0 
Revenue recognition1.6 22.4 
Investments in unconsolidated entities99.7 79.8 
Other17.0 15.5 
Total deferred tax liabilities
$572.2 $419.1 
Net deferred tax liabilities$(450.4)$(302.9)
In assessing the ability to realize the Company’s deferred tax assets, management considers whether it is more likely than not that some portion, or all, of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management considers the Company’s projected future taxable income and prudent and feasible tax planning strategies in making this assessment. The Company’s valuation allowances as of December 31,
2021 and 2020 are related primarily to foreign net operating losses and deferred tax assets.
The Company’s deferred tax assets for its state net operating loss carryforwards, which may be carried forward from 0 years to indefinitely, depending on the jurisdiction, totaled approximately $18.6 million and $15.7 million as of December 31, 2021 and 2020, respectively. The Company’s deferred tax assets for its foreign net operating loss carryforwards, which are primarily related to the Company’s Canadian operations, totaled approximately $57.7 million and $66.0 million as of December 31, 2021 and 2020, respectively. The Canadian net operating loss carryforwards, which make up the majority of the foreign net operating loss carryforwards, begin to expire in 2031. The Company’s deferred tax assets for its federal net operating loss carryforwards, which begin to expire in 2022, totaled $2.9 million and $0.1 million as of December 31, 2021 and December 31, 2020, respectively.
The Company is generally free of additional U.S. federal tax consequences on distributed foreign subsidiary earnings due to a dividends received deduction implemented as part of the move to a territorial tax system in connection with the Tax Cuts and Jobs Act of 2017. The Company has generally not made a provision for income taxes on unremitted foreign earnings because such earnings are insignificant and are intended to be indefinitely reinvested outside the United States. The Company expects that domestic cash resources will be sufficient to fund its domestic operations and cash commitments in the future.
A reconciliation of the U.S. statutory federal income tax rate related to pretax income to the effective tax rate for the periods indicated is as follows:
For the Years Ended December 31,
202120202019
U.S. statutory federal rate applied to pretax income
21.0 %21.0 %21.0 %
State and local income taxes, net of federal benefit
4.3 4.3 3.2 
Foreign tax rate differential
0.1 (0.2)0.2 
Non-deductible expenses
0.3 1.5 1.7 
Goodwill and intangible assets
0.4 (0.2)(0.5)
Change in tax rate
1.6 0.6 (1.5)
Other
0.8 (0.6)(1.0)
Tax credits
(4.8)(1.2)(0.6)
Stock basis adjustment
(0.9)0.0 (1.8)
Valuation allowance for deferred tax assets
0.3 (1.1)2.2 
Effective income tax rate
23.1 %24.1 %22.9 %
A reconciliation of the beginning and ending amount of uncertain tax positions including interest and penalties is as follows (in millions):
For the Years Ended December 31,
202120202019
Beginning balance$18.4 $13.5 $9.4 
Additions based on tax positions related to the current year4.4 1.5 3.7 
Additions for tax positions of prior years6.8 3.4 0.7 
Reductions for tax positions of prior years— — (0.3)
Settlements(5.1)— — 
Lapse of statute of limitations(0.8)— — 
Ending balance$23.7 $18.4 $13.5 
The Company classifies interest, penalties and recoveries related to uncertain tax positions as a component of income tax expense in the consolidated statements of operations. Income tax expense (benefit) related to uncertain tax positions totaled a net benefit of $0.3 million for the year ended December 31, 2021 and totaled expense of $1.4 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively. Accrued interest and penalties related to uncertain tax positions were $2.3 million and $2.6 million as of December 31, 2021 and 2020, respectively. The effect on the Company’s tax rate if it were to recognize its gross unrecognized tax benefits as of December 31, 2021 approximates $23.7 million, including interest and penalties.
The IRS has examined the Company’s federal income tax returns through 2017. The IRS examinations for 2016 and 2017 were recently completed, which examinations resulted in an immaterial refund. Certain foreign and state taxing authorities are examining various years. The final outcome of these examinations is not yet determinable. With few exceptions, as of December 31, 2021, the Company is no longer subject to state examinations by taxing authorities for years before 2018.