Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income or loss before income taxes for the periods indicated were as follows (in millions):

	For the Years Ended December 31,
	2024		2023		2022
Domestic	$	255.7	$	(84.9)	$	66.7
Foreign	(4.7)		2.2		(23.6)
Total	$	251.0	$	(82.7)	$	43.1

The provision for income taxes for the periods indicated were as follows (in millions):

	For the Years Ended December 31,
	2024		2023		2022
Current:
Federal	$	68.9	$	90.2	$	(9.8)
Foreign	7.8		1.8		3.6
State and local	9.3		13.5		5.8
	$	86.0	$	105.5	$	(0.4)
Deferred:
Federal	$	(26.2)	$	(119.7)	$	5.9
Foreign	0.0		(0.1)		0.6
State and local	(8.3)		(21.1)		3.1
	$	(34.5)	$	(140.9)	$	9.6
Provision for (benefit from) income taxes	$	51.5	$	(35.4)	$	9.2

The tax effects of significant items comprising the Company’s net deferred tax liability as of the dates indicated were as follows (in millions):

	December 31,
	2024		2023
Deferred tax assets:
Accrued insurance	$	54.0	$	51.2
Operating loss carryforwards and tax credits	93.3		87.5
Compensation and benefits	45.1		34.9
Bad debt	4.6		3.8
Other	20.5		24.4
Capitalized expenses	332.6		243.7
Valuation allowance	(64.7)		(60.4)
Total deferred tax assets	$	485.4	$	385.1
Deferred tax liabilities:
Property and equipment	$	299.7	$	345.9
Goodwill	112.9		95.0
Other intangible assets	75.8		96.7
Gain on remeasurement of equity investee	7.3		7.3
Revenue recognition	203.0		81.3
Investments in unconsolidated entities	117.6		113.3
Other	31.9		36.0
Total deferred tax liabilities	$	848.2	$	775.5
Net deferred tax liabilities	$	(362.8)	$	(390.4)

In assessing the ability to realize the Company’s deferred tax assets, management considers whether it is more likely than not that some portion, or all, of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management considers the Company’s projected future taxable income and prudent and feasible tax planning strategies in making this assessment. The Company’s valuation allowances as of both December 31, 2024 and 2023 are related primarily to foreign and state net operating losses and deferred tax assets.

The Company’s deferred tax assets for its state net operating loss carryforwards, which may be carried forward from 5 years to indefinitely, depending on the jurisdiction, totaled approximately $28.7 million and $24.7 million as of December 31, 2024 and 2023, respectively. The Company’s deferred tax assets for its foreign net operating loss carryforwards, which are primarily related to the Company’s Canadian operations, totaled approximately $56.0 million and $59.2 million as of December 31, 2024 and 2023, respectively. The Canadian net operating loss carryforwards, which make up the majority of the foreign net operating loss carryforwards, begin to expire in 2026. As of both December 31, 2024 and December 31, 2023, the Company had no deferred tax assets for its federal net operating loss carryforwards.

The Company is generally free of additional U.S. federal tax consequences on distributed foreign subsidiary earnings due to a dividends received deduction implemented as part of the move to a territorial tax system in connection with the Tax Cuts and Jobs Act of 2017. The Company has generally not made a provision for income taxes on unremitted foreign earnings because such earnings are insignificant and are intended to be indefinitely reinvested outside the United States. The Company expects that domestic cash resources will be sufficient to fund its domestic operations and cash commitments in the future.

A reconciliation of the U.S. statutory federal income tax rate related to pretax income to the effective tax rate for the periods indicated is as follows:

	For the Years Ended December 31,
	2024		2023		2022
U.S. statutory federal rate applied to pretax income	21.0	%	21.0	%	21.0	%
State and local income taxes, net of federal benefit	1.4		4.3		8.8
Foreign tax rate differential	0.2		(1.8)		1.3
Non-deductible expenses	5.6		(14.6)		(1.6)
Goodwill and intangible assets	0.0		1.8		(0.7)
Change in tax rate	(0.3)		(5.6)		12.7
Compensation and benefits	1.0		6.2		6.7
Non-controlling interest	(3.0)		0.7		(0.4)
Other	3.8		0.7		(7.6)
Tax credits	(10.0)		24.7		(37.9)
Stock basis adjustment	0.0		4.9		0.0
Valuation allowance for deferred tax assets	0.8		0.5		19.0
Effective income tax rate	20.5	%	42.8	%	21.3	%

A reconciliation of the beginning and ending amount of uncertain tax positions, excluding interest and penalties, follows in the table below (in millions).

	For the Years Ended December 31,
	2024		2023		2022
Beginning balance	$	60.9	$	39.3	$	21.4
Additions based on tax positions related to the current year	15.5		16.6		8.0
Additions for tax positions of prior years	6.6		9.5		15.9
Lapse of statute of limitations	(12.7)		(4.5)		(6.0)
Ending balance	$	70.3	$	60.9	$	39.3

The Company classifies interest, penalties and recoveries related to uncertain tax positions as a component of income tax expense in the consolidated statements of operations. For the years ended December 31, 2024, 2023 and 2022, interest and penalties totaled approximately $0.7 million, $2.6 million and $0.7 million, respectively. Accrued interest and penalties related to uncertain tax positions were $7.8 million and $5.9 million as of December 31, 2024 and 2023, respectively. The effect on the Company’s tax rate if it were to recognize its gross unrecognized tax benefits as of December 31, 2024 approximates $78.1 million, including interest and penalties. While it is possible that there could be audit settlements and/or lapses in certain statutes of limitation relating to uncertain tax positions, management has determined that it is too difficult to predict the outcome of such matters. During the next 12 months, the Company expects to settle state income tax audits and the applicable statutes of limitations may expire for federal and state uncertain tax positions, which may reduce uncertain tax positions. These reductions would be partially offset by additions, if any, of new uncertain tax positions expected in the next 12 months.

The IRS has examined the Company’s federal income tax returns through 2017. Certain foreign and state taxing authorities are examining various years. The final outcome of these examinations is not yet determinable. With few exceptions, as of December 31, 2024, the Company is no longer subject to state examinations by taxing authorities for years before 2016.