Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

14.Income Taxes

Income tax expense (benefit) for continuing operations consisted of the following:

	Year ended December 31,
(dollars in millions)	2024			2023			2022
Current:
Federal	$	—		$	—		$	—
State and local		0.1			—			—
Foreign		—			—			—
Total current		0.1			—			—
Deferred:
Federal		(47.0	)		(48.3	)		(31.0	)
State and local		(11.8	)		(7.0	)		(6.6	)
Foreign		—			—			—
Total deferred		(58.8	)		(55.3	)		(37.6	)
Valuation allowance		44.8			38.9			29.6
Total	$	(13.9	)	$	(16.4	)	$	(8.0	)

The following is a reconciliation of the statutory federal income tax rate with the effective tax rate for each period:

	Year ended December 31,
	2024			2023			2022
U.S. federal statutory rate		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal income tax		2.9			3.2			3.1
Non-Deductible meals and entertainment		(0.2	)		(0.2	)		(0.2	)
State net operating loss adjustments		1.1			(0.7	)		0.4
Change in valuation allowance, net of federal income tax		(18.9	)		(17.4	)		(19.0	)
Change in uncertain tax positions		—			0.2			—
Research and development credits		0.5			1.1			—
Other differences, net		(0.6	)		—			(0.2	)
Effective tax rate		5.8	%		7.2	%		5.1	%

The income tax (benefit) provision was charged to continuing operations or accumulated other comprehensive income as follows:

	Year ended December 31,
(dollars in millions)	2024			2023			2022
Income tax (benefit) provision related to:
Continuing operations	$	(13.9	)	$	(16.4	)	$	(8.0	)
Accumulated other comprehensive (loss) income		0.6			(0.7	)	7.6

The components of our deferred tax assets and liabilities were as follows:

	December 31,
(dollars in millions)	2024			2023
Deferred tax assets:
Net operating loss carryforwards	$	177.6		$	206.4
Finance and operating lease obligations		17.1			18.9
Pension and postretirement benefits		28.3			32.8
Employee benefits		3.3			3.8
Interest limitation		76.1			41.5
State tax credit		1.6			1.6
Deferred revenue		26.0			9.1
Other		13.5			13.2
Total deferred tax assets		343.5			327.3
Valuation allowance		(82.9	)		(28.0	)
Total deferred tax assets, net of valuation allowance	$	260.6		$	299.3
Deferred tax liabilities:
Property, plant and equipment and intangibles	$	(270.9	)	$	(293.0	)
Other		(10.0	)		(8.2	)
Total deferred tax liabilities		(280.9	)		(301.2	)
Net deferred tax liabilities	$	(20.3	)	$	(1.9	)

As of December 31, 2024, the Company had $776.7 million of federal net operating loss carryforwards with a deferred tax asset value of $163.1 million and $14.5 million in deferred tax assets related to state and local net operating loss carryforwards. The next remaining material tranche of Federal net operating loss carryforwards will expire in 2031, if unused before then. U.S. tax laws limit the annual utilization of net operating loss carryforwards of acquired entities.

The Company assessed all available positive and negative evidence to determine whether it expects that sufficient future taxable income will be generated to allow it to realize its existing deferred tax assets. Based on this analysis, there are not sufficient sources of future taxable income (e.g. reversing deferred tax liabilities) for management to conclude that it is more likely than not that the Company will utilize all available federal net operating losses and federal and state carryforwards for interest expense deductions that are limited under Section 163(j) of the Internal Revenue Code and similar state provisions, so an additional partial valuation allowance was recorded in 2024. In addition, realization of certain state and local net operating losses, as well as other deferred tax assets, is not certain, so valuation allowances have been recorded against certain of those deferred assets as well.

As of December 31, 2024 and 2023, the Company had valuation allowances of $82.9 million and $28.0 million, respectively, recorded against other deferred tax assets consisting primarily of federal, state and local net operating loss carryforwards, as well as federal and state carryforwards for interest expense deductions that are limited under Section 163(j) of the Internal Revenue Code and similar state provisions. Management has concluded that it is more likely than not that it will realize all other deferred tax assets.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $67.2 million at December 31, 2024 and $18.9 million at December 31, 2023. Accrued interest and penalties on income tax uncertainties were immaterial as of December 31, 2024 and 2023.

A reconciliation of the unrecognized tax benefits is as follows:

	Year ended December 31,
(dollars in millions)	2024		2023		2022
Balance, beginning of year	$	19.4	$	19.3	$	19.3
Change in tax positions for the current year		48.4		0.1		—
Balance, end of year	$	67.8	$	19.4	$	19.3

The change in positions for the current year represents a tax benefit reserve recorded related to the Company's tax basis in the Disposal Group, in connection with the CBTS and OnX businesses disposal transaction. The tax impact of the reserve is recorded in Income from discontinued operations (net of tax).

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. With a few exceptions, the Company is no longer subject to U.S. federal, state or local examinations for years before 2020.