XML 40 R30.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

19. Income Taxes

(Benefit from) provision for income taxes from continuing operations consists of the following for the periods presented (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Current:

 

 

 

 

 

 

 

 

 

Federal

 

$

68,939

 

 

$

63,041

 

 

$

48,292

 

State

 

 

14,413

 

 

 

13,769

 

 

 

6,715

 

Foreign

 

 

933

 

 

 

755

 

 

 

778

 

Total current provision

 

 

84,285

 

 

 

77,565

 

 

 

55,785

 

Deferred:

 

 

 

 

 

 

 

 

 

Federal

 

 

(72,046

)

 

 

9,808

 

 

 

13,339

 

State

 

 

(22,495

)

 

 

6,377

 

 

 

(1,892

)

Foreign

 

 

557

 

 

 

360

 

 

 

325

 

Total deferred provision

 

 

(93,984

)

 

 

16,545

 

 

 

11,772

 

(Benefit from) provision for income taxes

 

$

(9,699

)

 

$

94,110

 

 

$

67,557

 

 

A reconciliation of the U.S. federal statutory rate to the effective tax rate is as follows for the periods presented:

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

U.S. federal statutory rate on income before income
   taxed

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

Impact of foreign operations

 

 

(2.2

)

 

 

(0.1

)

 

 

1.7

 

State income taxes, net of federal tax effect

 

 

45.6

 

 

 

4.7

 

 

 

3.9

 

Nondeductible expenses and permanent differences

 

 

(30.7

)

 

 

0.4

 

 

 

2.1

 

Change in valuation allowance

 

 

(0.1

)

 

 

0.2

 

 

 

(2.8

)

Unrecognized tax benefit

 

 

(14.8

)

 

 

—

 

 

 

(0.9

)

Federal tax credits

 

 

9.8

 

 

 

(0.6

)

 

 

(0.8

)

Noncontrolling interest

 

 

7.4

 

 

 

(0.4

)

 

 

(0.4

)

Other

 

 

2.2

 

 

 

—

 

 

 

0.7

 

Effective income tax rate

 

 

38.2

%

 

 

25.2

%

 

 

24.5

%

For the year ended December 31, 2023, the benefit from income taxes was $(9.7) million, reflecting an effective tax rate of 38.2%, compared to the provision for income taxes of $94.1 million, reflecting an effective tax rate of 25.2%, for the year ended December 31, 2022. The Company’s lower pre-tax results for the year yields higher volatility in the items impacting the effective tax rate for the year ended December 31, 2023 when compared to prior periods.

The domestic and foreign components of (loss) income from continuing operations before income taxes are as follows (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Foreign

 

$

5,889

 

 

$

5,420

 

 

$

5,596

 

Domestic

 

 

(31,249

)

 

 

368,723

 

 

 

270,164

 

(Loss) income from continuing operations before income taxes

 

$

(25,360

)

 

$

374,143

 

 

$

275,760

 

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities of the Company at December 31, 2023 and December 31, 2022 were as follows (in thousands):

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Deferred tax assets:

 

 

 

 

 

 

Net operating losses and tax credit
   carryforwards – federal and state

 

$

5,729

 

 

$

7,333

 

Capital loss carryovers

 

 

215,175

 

 

 

215,745

 

Bad debt allowance

 

 

1,780

 

 

 

1,148

 

Accrued compensation and severance

 

 

18,250

 

 

 

18,784

 

Insurance reserves

 

 

17,343

 

 

 

20,924

 

Leases

 

 

948

 

 

 

862

 

Accrued expenses

 

 

1,091

 

 

 

—

 

Accrued Desert Hills settlement

 

 

104,636

 

 

 

—

 

Interest carryforward

 

 

2,430

 

 

 

2,639

 

Lease right-of-use liabilities

 

 

29,781

 

 

 

26,277

 

Fixed asset basis difference

 

 

2,914

 

 

 

2,128

 

Other assets

 

 

9,130

 

 

 

8,987

 

Total gross deferred tax assets

 

 

409,207

 

 

 

304,827

 

Less: valuation allowance

 

 

(217,137

)

 

 

(217,705

)

Deferred tax assets

 

 

192,070

 

 

 

87,122

 

Deferred tax liabilities:

 

 

 

 

 

 

Prepaid items

 

 

(4,609

)

 

 

(3,714

)

Accrued expenses

 

 

—

 

 

 

(5,713

)

Intangible assets

 

 

(152,284

)

 

 

(139,843

)

Lease right-of-use assets

 

 

(27,800

)

 

 

(24,960

)

Investment in foreign subsidiary

 

 

(2,650

)

 

 

(2,530

)

Total deferred tax liabilities

 

 

(187,343

)

 

 

(176,760

)

Total net deferred tax asset (liability)

 

$

4,727

 

 

$

(89,638

)

The Company records a valuation allowance to reduce its net deferred tax assets to the amount that is more likely than not to be realized. At December 31, 2023 and 2022, the Company carried a valuation allowance against deferred tax assets of $217.1 million and $217.7 million, respectively. These amounts are primarily related to deferred tax assets related to the Company’s capital loss carryforward resulting from the U.K. Sale and certain state net operating losses. If the capital loss carryforward is not utilized, it will expire in 2026.

As of December 31, 2023 and 2022, the Company had no federal net operating loss carryforwards. The foreign net operating loss carryforwards at December 31, 2023 and 2022 are approximately $0.1 million and $0.1 million, respectively, and have no expiration.

The Company has state net operating loss carryforwards at December 31, 2023 and 2022 of approximately $175.9 million and $191.5 million, respectively. These net operating loss carryforwards, if not used to offset future taxable income, will expire from 2024 to 2036. In addition, the Company has certain state tax credits of $0.2 million which will begin to expire in 2030 if not utilized.

Income taxes receivable was $12.4 million and $28.9 million at December 31, 2023 and 2022, respectively. At December 31, 2023, the $12.4 million of income taxes receivable is included in other current assets, while at December 31, 2022, $5.8 million of income taxes receivable was included in other current assets and $23.1 million was included in other assets in the consolidated balance sheets. Income taxes payable of $0.0 million and $1.3 million at December 31, 2023 and 2022, respectively, was included in other accrued liabilities in the consolidated balance sheets.

The Company has recorded liabilities related to unrecognized tax benefits of $4.0 million and $0.0 million at December 31, 2023 and 2022, respectively. These amounts are inclusive of interest and penalties of $0.9 million and $0.0 million, respectively, and are included in other liabilities on the consolidated balance sheets. The amount of unrecognized tax benefit, if realized, that would affect the effective tax rate is $3.8 million and $0.0 million at December 31, 2023 and December 31, 2022, respectively. A reconciliation of the beginning and ending amount of unrecognized income tax benefits, exclusive of any interest and penalties, is as follows (in thousands):

 

 

2023

 

2022

 

2021

 

Balance at January 1

$

—

 

$

—

 

$

2,060

 

Additions based on tax positions related to the current year

 

—

 

 

—

 

 

—

 

Additions for tax positions of prior years

 

3,089

 

 

—

 

 

—

 

Reductions as a result of the lapse of applicable
   statutes of limitations

 

—

 

 

—

 

 

(2,060

)

Balance at December 31

$

3,089

 

$

—

 

$

—

 

The Company and its subsidiaries file income tax returns in federal and in many state and local jurisdictions as well as foreign jurisdictions. The Company may be subject to examination by the Internal Revenue Service (“IRS”) for calendar years 2020 through 2022. Additionally, any net operating losses that were generated in prior years and utilized in these years may also be subject to examination by the IRS. While no foreign jurisdictions are presently under examination, the Company may be subject to examination for calendar years 2019 through 2022. Generally, for state tax purposes, the Company’s 2018 through 2022 tax years remain open for examination by the tax authorities. At the date of this report, there were no material audits or inquiries that had progressed sufficiently to predict their ultimate outcome.