Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

Our effective tax rate was 23.2% for the three months ended March 31, 2025, compared with 23.7% for the three months ended March 31, 2024. Our effective tax rate for each of these periods differs from the federal statutory rate primarily due to state income tax expense and federal tax credits.

At March 31, 2025 and December 31, 2024, we had net deferred tax liabilities of $408.9 million and $388.5 million, respectively. The accounting for deferred taxes is based upon estimates of future results. Differences between estimated and actual results could result in changes in the valuation of deferred tax assets that could have a material impact on our consolidated results of operations or financial position. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.

Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. We had $38.5 million and $38.7 million of gross unrecognized tax benefits at March 31, 2025 and December 31, 2024, respectively. Additionally, we had accrued interest and penalties of $2.0 million and $1.9 million at March 31, 2025 and December 31, 2024, respectively.