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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For the years ended December 31, income from continuing operations before income taxes consisted of the following:
(in thousands) | 2024 |  | 2023 |  | 2022
Income before income taxes |  |  |  |  |
Domestic | $ | 592,704 |  |  | $ | 548,428 |  |  | $ | 465,991 |
Foreign | 37,526 |  |  | 37,829 |  |  | 32,926 |
Total income from continuing operations before income taxes | $ | 630,230 |  |  | $ | 586,257 |  |  | $ | 498,917 |
For the years ended December 31, the Company’s income tax provision consisted of the following:
| 2024 |  | 2023 |  | 2022
(in thousands) |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 126,246 |  |  | $ | 112,647 |  |  | $ | 92,793 |
State | 36,328 |  |  | 33,516 |  |  | 26,786 |
Foreign | 11,613 |  |  | 12,781 |  |  | 9,144 |
Total current tax expense | 174,187 |  |  | 158,944 |  |  | 128,723 |
Deferred: |  |  |  |  |
Federal | (6,848) |  |  | (2,349) |  |  | (333) |
State | (2,336) |  |  | (2,925) |  |  | 2,011 |
Foreign | (1,152) |  |  | (2,370) |  |  | (83) |
Total deferred tax (benefit) expense | (10,336) |  |  | (7,644) |  |  | 1,595 |
Total income tax provision | $ | 163,851 |  |  | $ | 151,300 |  |  | $ | 130,318 |
The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
| 2024 |  | 2023 |  | 2022
(in thousands) |  |  |  |  |
Income tax at statutory rate | $ | 132,348 |  |  | $ | 123,114 |  |  | $ | 104,773 |
State income tax expense (net of federal benefit) | 26,854 |  |  | 24,167 |  |  | 22,750 |
Foreign tax rate differential | 2,071 |  |  | 1,948 |  |  | 1,907 |
Tax on unremitted earnings | 355 |  |  | 1,408 |  |  | 549 |
Federal tax credits | (1,296) |  |  | (1,362) |  |  | (616) |
Permanent items | 2,773 |  |  | 2,239 |  |  | 445 |
Other reconciling items | 746 |  |  | (214) |  |  | 510 |
Total income tax provision | $ | 163,851 |  |  | $ | 151,300 |  |  | $ | 130,318 |
Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. The Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 are as follows:
| 2024 |  | 2023
(in thousands) |  |  |
Deferred tax assets: |  |  |
Employee compensation and benefits | $ | 15,146 |  |  | $ | 15,451 |
Unearned revenues | 15,243 |  |  | 13,998 |
Insurance reserves | 29,773 |  |  | 24,152 |
Lease liabilities | 118,382 |  |  | 90,486 |
Non-amortizable intangible assets | 7,792 |  |  | 6,883 |
Other deferred tax assets | 16,415 |  |  | 14,944 |
Total deferred tax assets | 202,751 |  |  | 165,914 |
Valuation allowance | (7,792) |  |  | (6,883) |
Net deferred tax assets | $ | 194,959 |  |  | $ | 159,031 |
Deferred tax liabilities: |  |  |
Fixed assets and depreciation | $ | 9,599 |  |  | $ | 12,430 |
Intangible assets | 93,872 |  |  | 81,194 |
Right of use assets | 102,299 |  |  | 81,971 |
Other deferred tax liabilities | — |  |  | — |
Total deferred tax liabilities | $ | 205,770 |  |  | $ | 175,595 |
Net deferred taxes |  |  |
Deferred tax assets | 4,841 |  |  | 2,294 |
Deferred tax liabilities | (15,652) |  |  | (18,858) |
Net deferred taxes | $ | (10,811) |  |  | $ | (16,564) |
Deferred tax assets are included in "Other assets" and deferred tax liabilities are included in "Other long-term accrued liabilities" on the balance sheet. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. As of December 31, 2024, the Company increased its valuation allowance by approximately $0.9 million related to deferred tax assets on intangible assets held in Australia. The Company does not expect to recognize such deferred tax assets as it expects to continue its operations in Australia for the foreseeable future and the related intangible assets are not amortizable for tax purposes in Australia. The changes in the Company’s valuation allowance for deferred tax assets are as follows:
(in thousands) |
December 31, 2022 | $ | — |
Charged to income tax expense | 962 |
Charged to other accounts | 5,921 |
December 31, 2023 | 6,883 |
Charged to income tax expense | 909 |
Charged to other accounts | — |
December 31, 2024 | $ | 7,792 |
As of December 31, 2024, the Company has no net operating loss carryforwards in any federal, state, or foreign jurisdictions. The Company has a $0.2 million foreign tax credit carryforward which if not fully utilized will expire in 2026. The Company also has state tax credit carryforwards of $1.3 million which will begin to expire in 2026 if not fully utilized. We intend to continue to grow the business in the international markets where we have a presence. As of December 31, 2024, we assert that foreign cash earnings in excess of working capital and cash needed for strategic investments and acquisitions are not intended to be indefinitely reinvested offshore and we have included the tax effects of such current and/or future repatriations, including applicable state taxes and foreign withholding tax of such cash earnings in these financial statements. Any non-cash unremitted earnings in our foreign subsidiaries are considered to be permanently reinvested and deferred taxes have not been provided on these earnings. The total amount of unrecognized tax benefits as of December 31, 2024 that, if recognized, would affect the effective tax rate is $1.6 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 31, | 2024 |  | 2023 |  | 2022
(in thousands) |  |  |  |  |
Unrecognized tax benefits at beginning of year | $ | 1,784 |  |  | $ | 1,394 |  |  | $ | 1,018 |
Additions for tax positions of prior years | — |  |  | 653 |  |  | 376 |
Reductions for tax positions of prior years | (39) |  |  | (263) |  |  | — |
Settlements with taxing authorities | (161) |  |  | — |  |  | — |
Unrecognized tax benefits at end of year | $ | 1,584 |  |  | $ | 1,784 |  |  | $ | 1,394 |
As of December 31, 2024, the Company believes it is reasonably possible that the amount of unrecognized tax benefits may decrease by $1.4 million over the next 12 months as it relates to U.S. federal and foreign jurisdictions. The Company’s policy is to record interest and penalties related to income tax matters in income tax expense. Accrued interest and penalties were $0.6 million, $0.6 million and $0.2 million as of December 31, 2024, 2023 and 2022, respectively. The Company files U.S. federal income tax returns, as well as separate and combined income tax returns in numerous state and foreign jurisdictions. The Company is under examination in certain state jurisdictions for years ranging from 2019 through 2021. The Company regularly assesses the outcomes of both ongoing and future examinations for the current or prior years to determine whether the Company’s provision for income taxes is sufficient. The Company recognizes liabilities based on estimates of whether additional taxes will be due and believes its reserves are adequate in relation to any potential assessments. The outcome of any one examination, some of which may conclude during the next 12 months, is not expected to have a material impact on the Company’s financial position or results of operations.

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