INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

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



	For the Years Ended December 31,
	2017			2016			2015
Current income tax expense/(benefit):
Federal	$	(2.0	)	$	(0.5	)	$	2.2
State and local	(0.1		)	(0.1		)	0.5
	(2.1		)	(0.6		)	2.7
Deferred income tax expense/(benefit):
Federal	51.2			22.1			(0.5		)
State and local	1.0			2.4			(0.1		)
Foreign	—			—			(0.1		)
	52.2			24.5			(0.7		)
Income tax expense	$	50.1		$	23.9		$	2.0

Total income tax expense for the years ended December 31, 2017, 2016 and 2015 was allocated as follows (amounts in millions):



	For the Years Ended December 31,
	2017			2016			2015
Income from continuing operations	$	50.1		$	23.9		$	2.0
Interest expense	—			(0.1		)	0.2
Goodwill	—			—			(0.1		)
Stockholders’ equity	(0.3		)	(7.2		)	(2.1		)
	$	49.8		$	16.6		$	—

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 35 percent to income before taxes is as follows:



	For the Years Ended December 31,
	2017		2016		2015 (1)
Income tax expense at U.S. federal statutory rate	35.0	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefit	3.8		4.8		(7.1	)
Excess tax benefits from share-based compensation (2)	(3.5	)	—		—
Valuation allowance	0.2		0.1		79.1
Tax credits	(0.8	)	(0.6	)	136.0
Tax rate change (3)	26.5		—		—
Uncertain tax positions	(0.3	)	(1.0	)	(230.3	)
Other items, net (4)	1.1		0.6		(663.3	)
Income tax expense/(benefit)	62.0	%	38.9	%	(650.6	)%

(1)

The information provided for the year ended December 31, 2015 does not provide a meaningful reconciliation of the effective tax rate or 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. A significant asset impairment was recorded in the first quarter of 2015, resulting in a scenario where the company’s loss before tax for the year was near zero. Consequently, for 2015, the relationship between the “effective tax rate drivers” and loss before taxes is distorted.

(2)

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplified the accounting for share-based payment award transactions, including income tax consequences. The new guidelines required excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. As a result, the Company recognized a $2.9 million federal income tax benefit in the consolidated statement of operations (rather than additional paid-in capital) for the year ended December 31, 2017 from share-based compensation excess tax benefits.

(3)

On December 22, 2017, H.R. 1 (Tax Cuts and Jobs Act), which reduces the U.S. federal corporate tax rate to 21% from 35%, effective January 1, 2018 was enacted. According to ASC 740, Income Taxes, deferred tax assets and liabilities are remeasured to reflect the effects of enacted changes in tax rates at the date of enactment, even though the tax rate changes are not effective until a future period. The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate resulted in a $21.4 million deferred income tax expense during the three-month period ended December 31, 2017.


(4)	Includes various items such as, non-deductible expenses, non-taxable income and return-to-accrual adjustments.

Schedule of Net Deferred Tax Assets

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



	As of December 31,
	2017 (1)			2016
Deferred tax assets:
Allowance for doubtful accounts	$	5.3		$	6.9
Accrued payroll & employee benefits	9.0			11.4
Workers’ compensation	7.9			10.9
Amortization of intangible assets	26.0			56.3
Share-based compensation	6.1			7.8
Net operating loss carryforwards (2)	20.1			44.2
Tax credit carryforwards (3)	4.6			4.8
Other	2.4			1.1
Gross deferred tax assets	81.4			143.4
Less: valuation allowance	(0.7		)	(0.4		)
Net deferred tax assets	80.7			143.0
Deferred tax (liabilities):
Property and equipment	(4.0		)	(7.8		)
Deferred revenue	(18.0		)	(23.2		)
Investment in partnerships	(2.1		)	(3.2		)
Other liabilities	(0.5		)	(0.9		)
Gross deferred tax liabilities	(24.6		)	(35.1		)
Net deferred tax assets (liabilities)	$	56.1		$	107.9

(1)

On December 22, 2017, H.R. 1 (Tax Cuts and Jobs Act), which reduces the U.S. federal corporate tax rate to 21% from 35%, effective January 1, 2018, was enacted. According to ASC 740, Income Taxes, deferred tax assets and liabilities are remeasured to reflect the effects of enacted changes in tax rates at the date of enactment, even though the tax rate changes are not effective until a future period. The Company's remeasurement of its deferred tax assets and liabilities to reflect the enacted reduced tax rate resulted in a $21.4 million deferred income tax expense during the three-month period ended December 31, 2017.


(2)	The net operating loss (“NOL”) carry forwards in the income tax returns include unrecognized tax benefits resulting from uncertain tax positions. Accordingly, the deferred tax assets recognized for the NOL carry forwards, as of December 31, 2017 and 2016, are presented net of unrecognized tax benefits of $2.1 million and $3.1 million, respectively.


(3)	The tax credit carry forwards in the income tax returns include unrecognized tax benefits resulting from uncertain tax positions. Accordingly, the deferred tax assets recognized for the tax credit carry forwards are presented net of unrecognized tax benefits of $0.7 million for each of the years ended December 31, 2017 and 2016.

Schedule of Uncertain Tax Positions

Uncertain Tax Positions

We account for uncertain tax positions in accordance with the authoritative guidance for 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,
	2017			2016
Balance at beginning of period	$	4.1		$	4.7
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	(0.3		)	(0.6		)
Change in statutory tax rate	(1.1		)	—
Settlements	—			—
Balance at end of period	$	2.7		$	4.1