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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The Company is subject to U.S. federal income taxes and income taxes in numerous U.S. states. In addition, the Company is subject to income tax in the U.K. relative to its foreign subsidiaries. Income before income taxes by geographic area was as follows (in millions):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Domestic |  | $ | 721.8 |  |  | $ | 366.6 |  |  | $ | 227.9 |
Foreign |  | 79.2 |  |  | 14.2 |  |  | (5.3) |
Total income before income taxes |  | $ | 800.9 |  |  | $ | 380.8 |  |  | $ | 222.7 |
Federal, state and foreign income tax provisions from continuing operations were as follows (in millions):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Federal: |  |  |  |  |  |
Current |  | $ | 116.4 |  |  | $ | 70.8 |  |  | $ | 30.9 |
Deferred |  | 30.7 |  |  | 5.5 |  |  | 16.5 |
State: |  |  |  |  |  |
Current |  | 13.8 |  |  | 7.0 |  |  | 3.8 |
Deferred |  | 1.6 |  |  | (1.3) |  |  | 4.0 |
Foreign: |  |  |  |  |  |
Current |  | 14.8 |  |  | 6.3 |  |  | 1.8 |
Deferred |  | (1.8) |  |  | (4.1) |  |  | (3.3) |
Provision for income taxes |  | $ | 175.5 |  |  | $ | 84.2 |  |  | $ | 53.7 |
Actual income tax expense differed from income tax expense computed by applying the applicable U.S. federal statutory corporate tax rate of 21.0% to income before income taxes from continuing operations, as follows (in millions):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Provision at the U.S. federal statutory rate |  | $ | 168.1 |  |  | $ | 79.9 |  |  | $ | 46.7 |
Increase (decrease) resulting from: |  |  |  |  |  |
State income tax, net of benefit for federal deduction |  | 15.3 |  |  | 5.8 |  |  | 5.2 |
Foreign income tax rate differential |  | (1.0) |  |  | — |  |  | 0.3 |
Change in enacted tax rate — U.K. |  | (1.9) |  |  | — |  |  | — |
Tax Credits |  | (0.8) |  |  | (0.3) |  |  | (1.1) |
Changes in valuation allowances |  | (2.9) |  |  | (0.7) |  |  | 0.3 |
Stock-based compensation |  | (2.2) |  |  | (0.8) |  |  | — |
Uncertain tax benefits |  | — |  |  | (0.3) |  |  | 0.7 |
Other |  | 0.9 |  |  | 0.6 |  |  | 1.6 |
Provision for income taxes |  | $ | 175.5 |  |  | $ | 84.2 |  |  | $ | 53.7 |
For the year ended December 31, 2021, the Company recorded a tax provision of $175.5 million from continuing operations. The Company recognizes the tax on global intangible low-taxed income (“GILTI”) as a period expense in the period the tax is incurred. Under this policy, the Company has not provided deferred taxes related to temporary differences that upon their reversal will affect the amount of income subject to GILTI in the period. For the year ended December 31, 2021, the Company estimated $0.3 million of GILTI tax liability. The Company’s 2021 effective income tax rate was more than the U.S. federal statutory rate of 21.0% from continued operations, due primarily to: the taxes provided for in U.S. state jurisdictions; partially offset by: (1) foreign income taxed at a different tax rate than the U.S. statutory rate, (2) reduced valuation allowances provided for NOLs in certain U.S. states, and (3) excess tax deductions for stock based compensation. As a result of these items recorded in 2021 compared to the 2020 items discussed below, the effective tax rate for the year ended December 31, 2021 decreased to 21.9%, as compared to 22.1% for the year ended December 31, 2020. The Company's 2020 effective income tax rate was more than the U.S. federal statutor y rate of 21.0%, due primarily to: the taxes provided for in U.S. state jurisdictions; partially offset by: (1) reduced valuation allowances provided for NOLs in certain U.S. states, and (2) excess tax deductions for stock-based compensation. As a result of these items recorded in 2020, compared to the 2019 items discussed below, the effective tax rate for the year ended December 31, 2020, decreas ed to 22.1%, as compared to 24.1% fo r the year ended December 31, 2019. The Company's 2019 effective income tax rate was more than the U.S. federal statutor y rate of 21.0%, due primarily to: (1) the taxes provided for in U.S. state jurisdictions; and (2) increases in uncertain tax benefits, partially offset by tax credits. As a result of these items recorded in 2019, the effective tax rate for the year ended December 31, 2019, was 24.1%. Deferred income tax provisions resulted from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. The tax effects of these temporary differences representing deferred tax assets/liabilities resulted principally from the following (in millions):
|  | December 31,
|  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Loss reserves and accruals |  | $ | 53.5 |  |  | $ | 50.4 |
Interest rate swaps |  | — |  |  | 10.0 |
U.S. state NOL carryforwards |  | 30.8 |  |  | 34.5 |
Operating lease liabilities |  | 79.5 |  |  | 55.8 |
Other |  | 2.8 |  |  | 2.2 |
Deferred tax assets |  | 166.6 |  |  | 152.9 |
Less: valuation allowance on deferred tax assets |  | 24.2 |  |  | 30.9 |
Net deferred tax assets |  | $ | 142.4 |  |  | $ | 122.0 |
Deferred tax liabilities: |  |  |  |
Goodwill and intangible franchise rights |  | $ | 152.2 |  |  | $ | 142.0 |
Depreciation expense |  | 99.4 |  |  | 71.1 |
Interest rate swaps |  | 0.6 |  |  | — |
Operating lease ROU assets |  | 63.5 |  |  | 44.0 |
Other |  | 1.7 |  |  | 2.0 |
Deferred tax liabilities |  | 317.4 |  |  | 259.1 |
Net deferred tax liability |  | $ | 175.0 |  |  | $ | 137.1 |
The classification of the continued operations of the Company’s net deferred tax liability within the Consolidated Balance Sheets is as follows (in millions):
|  | December 31,
|  | 2021 |  | 2020
Deferred tax asset, included in Other long-term assets |  | $ | 5.9 |  |  | $ | 3.9 |
Deferred tax liability, included in Deferred income taxes |  | 180.9 |  |  | 141.0 |
Net deferred tax liability |  | $ | 175.0 |  |  | $ | 137.1 |
As of December 31, 2021, the Company had state pre-tax NOL carryforwards in the U.S. of $500.6 million that will expire between 2022 and 2041, and U.K. pre-tax NOL carryforwards of $9.9 million that may be carried forward indefinitely. To the extent that the Company expects that net income will not be sufficient to realize these NOLs in certain jurisdictions, a valuation allowance has been established. The Company believes it is more-likely-than-not that its deferred tax assets, net of valuation allowances provided, will be realized, based primarily on its expectation of future taxable income, considering future reversals of existing taxable temporary differences. As of December 31, 2021, the continued operations of the Company had one controlled foreign corporation that owns its foreign operations in the U.K. (the “Foreign Subsidiary”). The Company has not provided for U.S. deferred taxes on the outside basis differences of its Foreign Subsidiary, as the Company has taken the position that its investment in the Foreign Subsidiary will be permanently reinvested outside the U.S. The book basis for the Company’s Foreign Subsidiary exceeded the tax basis by approximate ly $26.3 million, as of December 31, 2021. If a taxable event resulting in the recognition of these outside basis differences occurred, the resulting tax would not be material. Based on the statutes of limitations in the applicable jurisdiction in which the Company operates, the Company is generally no longer subject to examinations by U.S. tax authorities in years prior to 2017 and by U.K. tax authorities in years prior to 2018. A reconciliation of the Company’s unrecognized tax benefits is as follows (in millions):
| 2021 |  | 2020 |  | 2019
Balance at January 1 | $ | 2.0 |  |  | $ | 2.4 |  |  | $ | 1.6 |
Additions for current tax | 0.5 |  |  | 0.5 |  |  | 1.0 |
Additions based on tax positions in prior years | — |  |  | — |  |  | — |
Reductions for tax positions | — |  |  | (0.4) |  |  | — |
Settlements with tax authorities | — |  |  | — |  |  | — |
Reductions due to lapse of statutes of limitations | (0.5) |  |  | (0.5) |  |  | (0.2) |
Balance at December 31 | $ | 2.0 |  |  | $ | 2.0 |  |  | $ | 2.4 |
Included in the balance of unrecognized tax benefits as of December 31, 2021, 2020 and 2019, are $1.6 million, $1.7 million and $2.1 million, respectively, of tax benefits that would affect the effective tax rate if recognized. For the years ended December 31, 2021, 2020 and 2019 the Company recorded approximately $0.3 million, $0.3 million, $0.3 million, respectively, of interest and penalty related to its uncertain tax positions. Consistent with prior practice, the Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the Consolidated Statements of Operations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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