Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

(7) Income Taxes

The components of our income tax expense are as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current income tax expense	$	(1.2)	$	(0.3)	$	(1.5)	$	(1.0)
Deferred income tax expense	(9.4)		(14.9)		(39.0)		(16.1)
Income tax expense	$	(10.6)	$	(15.2)	$	(40.5)	$	(17.1)

The following schedule reconciles income tax expense and the amount calculated by applying the statutory U.S. federal tax rate to income before non-controlling interest and income taxes (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Expected income tax expense based on federal statutory rate	$	(8.4)	$	(20.0)	$	(38.3)	$	(45.9)
State income tax expense, net of federal benefit	(1.1)		(2.6)		(4.9)		(6.2)
Unit-based compensation (1)	0.9		1.4		7.5		(0.6)
Change in valuation allowance	—		10.9		—		39.0
Other	(2.0)		(4.9)		(4.8)		(3.4)
Income tax expense	$	(10.6)	$	(15.2)	$	(40.5)	$	(17.1)

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(1)Related to book-to-tax differences recorded upon the vesting of unit-based awards.

Deferred Tax Assets and Liabilities

Deferred income taxes reflect 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. The deferred tax liabilities, net of deferred tax assets, are included in “Deferred tax liability, net” in the consolidated balance sheets. As of September 30, 2023, we had $774.1 million of deferred tax assets and $856.9 million of deferred tax liabilities for net deferred tax liabilities of $82.8 million. As of December 31, 2022, we had $714.1 million of deferred tax assets and $756.8 million of deferred tax liabilities for net deferred tax liabilities of $42.7 million.

We provide a valuation allowance, if necessary, to reduce deferred tax assets, if all, or some portion, of such assets will more than likely not be realized. As of September 30, 2023, we did not record a valuation allowance and management believes it is more likely than not that the Company will realize the benefits of the deferred tax assets.

Excise Tax on Common Unit Repurchases

In August 2022, the Inflation Reduction Act of 2022 was signed into law, which, among other things, imposed a 1.0% excise tax on net common unit repurchases made after December 31, 2022. As a result, we accrued $0.5 million and $1.2 million of excise tax in connection with our net common unit repurchases for the three and nine months ended September 30, 2023, respectively, which was recorded as an adjustment to the cost basis of common units repurchased in “Members’ equity” and “Other current liabilities” on the consolidated balance sheet as of