Income Taxes

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

The Company recorded income tax expense of $65.2 million, or 24.1% of pre-tax income, for the three months ended June 30, 2025, compared to $53.5 million, or 23.4% of pre-tax income, for the three months ended June 30, 2024. Results for the three months ended June 30, 2025 were impacted by $0.1 million of net discrete tax benefits. 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.

The Company recorded income tax expense of $102.0 million, or 24.2% of pre-tax income, for the six months ended June 30, 2025, compared to $108.2 million, or 23.2% of pre-tax income, for the six months ended June 30, 2024. Results for the six months ended June 30, 2025 were impacted by $1.4 million of net discrete tax expense. 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.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $63.8 million and $61.6 million as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025, net unrecognized tax benefits, excluding interest and penalties, of $53.6 million would affect the Company’s net income if recognized. 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, 2025 and 2024, the Company recognized expense of $1.9 million and $2.1 million, respectively, related to interest and penalties on unrecognized tax benefits. At June 30, 2025, the Company had accruals for the payment of interest and penalties of $13.8 million. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by $38.8 million, either because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statute of limitations closes.

“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, 2025 and 2024 of $7.0 million and $44.3 million, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA includes provisions to expense previously deferred domestic research and development costs, increase bonus depreciation and modify the international tax framework. The Company expects the OBBBA to reduce the Company's tax payments in 2025 by approximately $100 million as a result of the acceleration of deductions. The Company continues to evaluate the OBBBA and does not currently believe it will have a material impact on its provision for income taxes.