Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

16. Income Taxes

The benefit from income taxes is as follows:

	Year Ended December 31,
(in thousands)	2024			2023			2022
Current tax expense
Federal	$	916		$	24,805		$	15,973
State		2,004			9,784			5,337
Foreign		9,605			13,456			13,941
Total current tax expense		12,525			48,045			35,251
Deferred tax benefit
Federal		(59,986	)		(66,730	)		(130,718	)
State		(14,245	)		(16,230	)		(59,537	)
Foreign		(1,081	)		(2,733	)		(3,438	)
Total deferred tax benefit		(75,312	)		(85,693	)		(193,693	)
Total benefit from income taxes	$	(62,787	)	$	(37,648	)	$	(158,442	)

A reconciliation of the Company's effective income tax rate as compared to the federal statutory income tax rate is as follows:

	Year Ended December 31,
	2024			2023			2022
Statutory U.S. rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.2	%		4.3	%		2.7	%
Foreign tax, net of federal tax benefit		(0.8	%)		(2.9	%)		(0.2	%)
Deconsolidation of subsidiaries		0.0	%		14.0	%		0.0	%
Goodwill impairment		(6.2	%)		0.0	%		(13.5	%)
Equity-based compensation		0.1	%		(2.3	%)		0.0	%
Work opportunity tax credit		0.6	%		2.5	%		0.2	%
Disallowed executive compensation		(0.6	%)		(1.8	%)		(0.2	%)
Meals and entertainment		(0.5	%)		(2.0	%)		(0.1	%)
Contingent consideration fair value adjustment		0.0	%		(0.4	%)		0.0	%
Fair value adjustment of warrant liability		0.0	%		0.1	%		0.3	%
Other		(1.6	%)		(0.8	%)		(0.2	%)
Effective tax rate		14.2	%		31.7	%		10.0	%

The geographic components of loss before income taxes are as follows:

	Year Ended December 31,
(in thousands)	2024			2023			2022
U.S. sources	$	(452,261	)	$	(217,097	)	$	(1,598,544	)
Non-U.S. sources		11,070			98,238			21,450
Loss from continuing operations before income taxes	$	(441,191	)	$	(118,859	)	$	(1,577,094	)

Net deferred tax liabilities consist of the following:

	December 31,
(in thousands)	2024			2023
Deferred tax assets
Accrued liabilities	$	63,915		$	82,600
Interest expense		88,466			71,478
Right-of-use liabilities		9,517			12,748
Net operating losses		2,855			5,471
Acquisition and divestiture related expenses		5,460			6,511
Capitalized research and development costs		2,919			4,849
Contingent consideration		—			1,662
Insurance reserves		2,599			2,204
Acquired intangible assets, including goodwill		1,419			1,302
Other		2,977			6,274
Total deferred tax assets		180,127			195,099
Deferred tax liabilities
Acquired intangible assets, including goodwill		299,981			357,657
Interest rate collars and caps		414			6,799
Right-of-use assets		6,465			8,955
Debt issuance costs		6,359			7,242
Reorganization expenses		—			3,276
Other		7,861			9,561
Total deferred tax liabilities		321,080			393,490
Less: deferred income tax asset valuation allowances		(3,199	)		(3,491	)
Net deferred tax liabilities	$	144,152		$	201,882
	December 31,
(in thousands)	2024			2023
Reported as:
Noncurrent deferred tax asset	$	2,737		$	2,254
Noncurrent deferred tax liabilities		146,889			204,136
Net deferred tax liabilities	$	144,152		$	201,882

Income tax expense from discontinued operations was $41.3 million, $8.6 million and $13.1 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively. Income tax expense for the fiscal years ended December 31, 2024, 2023 and 2022 was impacted primarily by the sale of the divested entities and changes in the income before income taxes from discontinued operations. T

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act, which, among other things, imposes a new corporate alternative minimum tax and an excise tax on stock buybacks. As of December 31, 2024, the Company has determined that the Act had no tax impacts on its consolidated financial statements.

The Organization for Economic Co-operation and Development (“OECD”) published its model rules “Tax Challenges Arising From the Digitalization of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15% for certain multinational enterprises. Many countries have implemented or are in the process of implementing the Pillar Two legislation, which will apply to the Company. While the Company does not currently estimate a material impact to the consolidated financial statements, the Company continues to monitor the impact as countries implement legislation and the OECD provides additional guidance.

The Company held cash and cash equivalents in foreign subsidiaries of $65.0 million and $44.0 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the undistributed earnings of the Company’s foreign subsidiaries was $130.7 million and $125.1 million, respectively.

The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2024, except for a $0.6 million deferred tax liability for unremitted earnings in Canada with respect to which the

Company no longer has an indefinite reinvestment assertion. Taxes have not been provided on the remaining $114.2 million of undistributed foreign earnings. The incremental tax liability associated with these earnings is expected to be immaterial.

The Company evaluates its deferred tax assets, including a determination of whether a valuation allowance is necessary, based upon its ability to utilize the assets using a more likely than not analysis. Deferred tax assets are only recorded to the extent that they are realizable based upon past and future income. The Company’s valuation allowances on its deferred tax assets as of December 31, 2024, 2023 and 2022 were $3.2 million, $3.5 million and $3.6 million, respectively.

As of December 31, 2024, the Company had $3.6 million of United States Federal Net Operating Losses (“NOL”), $30.1 million state NOL, and $3.9 million foreign NOL. The change of ownership provisions of the Tax Reform Act of 1986 may limit utilization of a portion of the Company’s domestic NOL to future periods. The United States Federal NOL expires in tax year 2037, $17.9 million of the state NOL expires between tax years 2024 and 2043 and the remaining $12.2 million of the state NOL carry forward indefinitely. Foreign NOL of $1.2 million expires between tax years 2024 and 2034 and the remaining $2.7 million of the foreign NOL carry forward indefinitely.

Uncertain Tax Positions

The Company accounts for uncertain tax positions when it is more likely than not that the tax position will not be sustained on examination by the taxing authorities, based on the technical merits of the position. As of December 31, 2024, 2023, and 2022, the Company’s unrecognized tax benefits were $2.9 million, $2.9 million and $0.6 million, respectively. The Company recorded uncertain tax positions related to capitalizing interest to inventory and California research and development credits for the year ended December 31, 2024. $2.2 million out of the $2.9 million of the unrecognized tax benefits as of December 31, 2024 would be included in the effective tax rate if recognized in future periods.

	December 31,
(in thousands)	2024			2023			2022
Beginning unrecognized tax benefits	$	2,887		$	560		$	563
Increases for tax positions related to prior years		—			2,350			—
Decreases due to lapsed statutes of limitations		(29	)		(23	)		(3	)
Ending unrecognized tax benefits	$	2,858		$	2,887		$	560

The Company is unaware of any positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase within the next twelve months. The Company files tax returns in the United States, various states and foreign jurisdictions. With few exceptions, as of December 31, 2024, the Company is no longer subject to federal, state, or non-U.S. income tax examinations by tax authorities for years prior to 2020. The Company does not have any material ongoing income tax audits.

The Company has elected to classify interest and penalties as components of tax expense. These amounts were $1.4 million, $0.9 million and $0.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.