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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense (benefit) is comprised of the following (in millions):
Year Ended December 31,
202420232022
Current:
Federal$— $— $— 
State3.1 1.4 1.5 
Deferred:
Federal114.6 (1.5)17.5 
State16.9 (0.2)4.3 
Total income tax expense (benefit)
$134.6 $(0.3)$23.3 
A reconciliation of the provision for income taxes as reported in the consolidated statements of operations and the amount of income tax expense (benefit) computed by multiplying consolidated income (loss) in each year by the U.S. federal statutory rate of 21% follows (in millions):
Year Ended December 31,
202420232022
Tax expense at U.S. federal statutory rate
$30.8 $28.4 $23.2 
State income tax, net of U.S. federal tax benefit19.9 0.9 6.0 
Change in federal valuation allowance115.4 21.5 29.1 
Net income attributable to non-controlling interests(41.5)(30.9)(30.2)
Stock option compensation5.5 0.1 (2.5)
Differences related to divested facilities(3.3)(18.9)(1.4)
Tax return reconciling differences8.0 (1.0)(1.0)
Change in effective tax rate— — (0.5)
Tax receivable agreement liability
— — 0.4 
Other(0.2)(0.4)0.2 
Total income tax expense (benefit)
$134.6 $(0.3)$23.3 
The components of temporary differences and the approximate tax effects that give rise to the Company’s net deferred tax balance are as follows (in millions):
December 31,
20242023
Deferred tax assets:
Medical malpractice liability$3.8 $3.6 
Accrued vacation and incentive compensation0.2 3.0 
Net operating loss carryforwards142.9 143.6 
Allowance for bad debts1.1 1.2 
Capital loss carryforwards3.3 1.8 
Deferred financing costs— 3.3 
Section 163(j) interest191.6 162.3 
Interest rate derivative liability2.5 4.7 
Right of use liability
46.2 47.2 
Software development costs2.1 1.7 
Other deferred assets9.9 9.6 
Total gross deferred tax assets403.6 382.0 
Less: Valuation allowance(284.7)(150.1)
Total deferred tax assets118.9 231.9 
Deferred tax liabilities:
Depreciation on property and equipment(1.3)(3.0)
Basis differences of partnerships and joint ventures(106.7)(84.2)
Right of use asset
(36.8)(35.6)
Deferred financing costs
(5.3)— 
Amortization of intangible assets(3.1)(3.0)
Interest rate derivative asset(2.9)(15.1)
Other deferred liabilities(2.0)(1.5)
Total deferred tax liabilities(158.1)(142.4)
Net deferred tax (liabilities) assets
$(39.2)$89.5 
The Company had federal NOL carryforwards of $529.0 million as of December 31, 2024, of which $434.3 million expire between 2030 and 2037. The remaining federal NOL carryforwards, which were generated after 2017, do not expire. The Company had state NOL carryforwards of $630.7 million as of December 31, 2024, which expire between 2025 and 2043. The Company had federal Section 163(j) interest limitation carryforwards of $792.1 million as of December 31, 2024, which do not expire.
The Company recorded a valuation allowance against deferred tax assets at December 31, 2024 and 2023 totaling $284.7 million and $150.1 million, respectively, which represents an increase of $134.6 million. As of December 31, 2024, the Company was in a cumulative three-year pre-tax loss position and primarily due to this negative factor increased its valuation allowance during the year ended December 31, 2024.
The Company, or one or more of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal income tax examinations for years prior to 2021 or state income tax examinations for years prior to 2020.
The Company made income tax payments of $1.6 million, $1.4 million and $1.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. In each of these periods the income tax payments related to states in which the Company does not have a NOL to offset taxable income. During the years ended December 31, 2024, 2023 and 2022, the Company made no federal income tax payments due to utilization of its NOL carryforwards.
A reconciliation of the beginning and ending liability for gross unrecognized tax benefits for the years ended December 31, 2024 and 2023 is as follows (in millions):
December 31,
20242023
Unrecognized tax benefits at beginning of year$— $0.1 
Additions for tax provisions of the current year
— — 
Additions for acquired positions
— — 
Additions for tax positions of prior years
— — 
Reductions for tax positions of prior years— (0.1)
Reductions for statute of limitations expirations
— — 
Unrecognized tax benefits at end of year$— $— 
The Company recognizes interest and penalties related to uncertain tax positions in its provision for income taxes in the consolidated statements of operations. For the years ended December 31, 2024 and 2023, the Company had no accrued interest and penalties related to uncertain tax positions.