Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

The Company recorded income tax expense of $53.5 million, or 23.4% of pre-tax income, for the three months ended June 30, 2024, compared to $56.3 million, or 24.3% of pre-tax income, for the three months ended June 30, 2023. Results for the three months ended June 30, 2024 were impacted by $2.0 million of net discrete tax benefits, including a $1.9 million benefit on the purchase of discounted federal tax credits. Results for the three months ended June 30, 2023 were impacted by $1.2 million of net discrete tax charges.

The Company recorded income tax expense of $108.2 million, or 23.2% of pre-tax income, for the six months ended June 30, 2024, compared to $90.5 million, or 25.1% of pre-tax income, for the six months ended June 30, 2023. Results for the six months ended June 30, 2024 were impacted by $4.2 million of net discrete tax benefits, including a $3.1 million benefit on the purchase of discounted federal tax credits and a $1.0 million benefit related to amended state returns. Results for the six months ended June 30, 2023 were impacted by $4.2 million of net discrete tax charges, including a $2.5 million charge related to a valuation allowance recorded with respect to unrealizable foreign tax credits and a $1.7 million charge related to a valuation allowance recorded with respect to a deferred tax asset on marketable securities.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $66.2 million and $64.3 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, net unrecognized tax benefits, excluding interest and penalties, of $52.4 million would affect the Company’s net income if recognized. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $23.0 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the six months ended June 30, 2024 and 2023, the

Company recognized expense of $2.1 million and $0.9 million, respectively, related to interest and penalties on unrecognized tax benefits. At June 30, 2024, the Company had accruals for the payment of interest and penalties of $9.9 million.

Cash paid for income taxes, net of refunds disclosed on the Condensed Consolidated Statements of Cash Flows includes cash paid for the purchase of transferable tax credits during the six months ended June 30, 2024 and 2023 of $44.3 million and $2.9 million, respectively.