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v3.25.4

Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income or loss before income taxes for the periods indicated were as follows (in millions):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Domestic | $ | 516.5 |  |  | $ | 255.7 |  |  | $ | (84.9) |
Foreign | (1.1) |  |  | (4.7) |  |  | 2.2 |
Total | $ | 515.4 |  |  | $ | 251.0 |  |  | $ | (82.7) |
The provision for income taxes for the periods indicated were as follows (in millions):
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |
Federal | $ | (51.2) |  |  | $ | 68.9 |  |  | $ | 90.2 |
Foreign | 1.9 |  |  | 7.8 |  |  | 1.8 |
State and local | 27.5 |  |  | 9.3 |  |  | 13.5 |
| $ | (21.8) |  |  | $ | 86.0 |  |  | $ | 105.5 |
Deferred: |  |  |  |  |
Federal | $ | 143.3 |  |  | $ | (26.2) |  |  | $ | (119.7) |
Foreign | (9.7) |  |  | 0.0 |  |  | (0.1) |
State and local | (18.4) |  |  | (8.3) |  |  | (21.1) |
| $ | 115.2 |  |  | $ | (34.5) |  |  | $ | (140.9) |
Provision for (benefit from) income taxes | $ | 93.4 |  |  | $ | 51.5 |  |  | $ | (35.4) |
The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 for income taxes paid, net of refunds, for the year ended December 31, 2025 (in millions):
| Year ended December 31, 2025
Federal taxes | $ | 25.0 |
State taxes |
Virginia | 3.8 |
Pennsylvania | 2.5 |
Other state jurisdictions | 10.7 |
Foreign taxes | 2.4 |
Income taxes paid, net of refunds | $ | 44.4 |
The following table presents income taxes paid, net of refunds, for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09 (in millions):
| Years ended December 31,
| 2024 |  | 2023
Income taxes paid, net of refunds | $ | 44.0 |  |  | $ | 9.6 |
The tax effects of significant items comprising the Company’s net deferred tax liability as of the dates indicated were as follows (in millions):
| December 31,
| 2025 |  | 2024
Deferred tax assets: |  |  |
Accrued insurance | $ | 66.7 |  |  | $ | 54.0 |
Operating loss carryforwards and tax credits | 88.3 |  |  | 93.3 |
Compensation and benefits | 47.5 |  |  | 45.1 |
Bad debt | 4.3 |  |  | 4.6 |
Other | 13.4 |  |  | 20.5 |
Capitalized expenses | 43.2 |  |  | 332.6 |
Valuation allowance | (61.0) |  |  | (64.7) |
Total deferred tax assets | $ | 202.4 |  |  | $ | 485.4 |
Deferred tax liabilities: |  |  |
Property and equipment | $ | 323.2 |  |  | $ | 299.7 |
Goodwill | 124.1 |  |  | 112.9 |
Other intangible assets | 52.6 |  |  | 75.8 |
Gain on remeasurement of equity investee | 7.2 |  |  | 7.3 |
Revenue recognition | 26.8 |  |  | 203.0 |
Investments in unconsolidated entities | 114.1 |  |  | 117.6 |
Other | 32.6 |  |  | 31.9 |
Total deferred tax liabilities | $ | 680.6 |  |  | $ | 848.2 |
Net deferred tax liabilities | $ | (478.2) |  |  | $ | (362.8) |
In assessing the ability to realize the Company’s deferred tax assets, management considers whether it is more likely than not that some portion, or all, of its deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management considers the Company’s projected future taxable income and prudent and feasible tax planning strategies in making this assessment. The Company’s valuation allowances as of both December 31, 2025 and 2024 are related primarily to foreign and state net operating losses and deferred tax assets. The Company’s deferred tax assets for its state net operating loss carryforwards, which may be carried forward from 5 years to indefinitely, depending on the jurisdiction, totaled approximately $25.9 million and $28.7 million as of December 31, 2025 and 2024, respectively. The Company’s deferred tax assets for its foreign net operating loss carryforwards, which are primarily related to the Company’s Canadian operations, totaled approximately $54.9 million and $56.0 million as of December 31, 2025 and 2024, respectively, and begin to expire in 2026. As of both December 31, 2025 and December 31, 2024, the Company had no deferred tax assets for its federal net operating loss carryforwards. The Company is generally free of additional U.S. federal tax consequences on distributed foreign subsidiary earnings due to a dividends received deduction implemented as part of the move to a territorial tax system in connection with the Tax Cuts and Jobs Act of 2017 (“TCJA”). The Company has generally not made a provision for income taxes on unremitted foreign earnings because such earnings are insignificant and are intended to be indefinitely reinvested outside the United States. The Company expects that domestic cash resources will be sufficient to fund its domestic operations and cash commitments in the future. The Company adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 and reconciles the U.S. statutory federal income tax rate related to pretax income to the effective amount and tax rate for the year ended December 31, 2025 (dollar amounts in millions):
| December 31, 2025
| Amount |  | Percent
U.S. statutory federal rate | $ | 108.3 |  |  | 21.0 | %
State and local income tax, net of federal (national) income tax effect (a) | 15.8 |  |  | 3.1 |
Foreign tax effects: |  |  |
Canada |  |  |
Changes in valuation allowances | (8.7) |  |  | (1.7) |
Other | 0.6 |  |  | 0.1 |
Other foreign jurisdictions | 0.5 |  |  | 0.1 |
Tax credits: |  |  |
Research and development credit | (20.4) |  |  | (4.0) |
Other | (0.7) |  |  | (0.1) |
Nontaxable or nondeductible items: |  |  |
Nondeductible employee expenses | 16.1 |  |  | 3.1 |
Other | (6.2) |  |  | (1.2) |
Changes in unrecognized tax benefits | (11.4) |  |  | (2.2) |
Other adjustments | (0.5) |  |  | (0.1) |
Effective tax rate | $ | 93.4 |  |  | 18.1 | %
(a) While no state jurisdiction is individually material, California, Florida, Pennsylvania and Virginia made up the majority (greater than 50%) of the Company’s state taxes. The following table presents the required disclosures prior to the adoption of ASU 2023-09 and reconciles the U.S. statutory federal income tax rate related to pretax income to the effective tax rate for the years ended December 31, 2024 and 2023:
| Year Ended December 31,
| 2024 |  | 2023
U.S. statutory federal rate applied to pretax income | 21.0 | % |  | 21.0 | %
State and local income taxes, net of federal benefit | 1.4 |  |  | 4.3 |
Foreign tax rate differential | 0.2 |  |  | (1.8) |
Non-deductible expenses | 5.6 |  |  | (14.6) |
Goodwill and intangible assets | 0.0 |  |  | 1.8 |
Change in tax rate | (0.3) |  |  | (5.6) |
Compensation and benefits | 1.0 |  |  | 6.2 |
Non-controlling interest | (3.0) |  |  | 0.7 |
Other | 3.8 |  |  | 0.7 |
Tax credits | (10.0) |  |  | 24.7 |
Stock basis adjustment | 0.0 |  |  | 4.9 |
Valuation allowance for deferred tax assets | 0.8 |  |  | 0.5 |
Effective income tax rate | 20.5 | % |  | 42.8 | %
A reconciliation of the beginning and ending amount of uncertain tax positions, excluding interest and penalties, follows in the table below (in millions).
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Beginning balance | $ | 70.3 |  |  | $ | 60.9 |  |  | $ | 39.3 |
Additions based on tax positions related to the current year | 13.9 |  |  | 15.5 |  |  | 16.6 |
Additions for tax positions of prior years | — |  |  | 6.6 |  |  | 9.5 |
Reductions for tax positions of prior years | (2.7) |  |  | — |  |  | — |
Settlements | (6.6) |  |  | — |  |  | — |
Lapse of statute of limitations | (16.4) |  |  | (12.7) |  |  | (4.5) |
Ending balance | $ | 58.5 |  |  | $ | 70.3 |  |  | $ | 60.9 |
The Company classifies interest, penalties and recoveries related to uncertain tax positions as a component of income tax expense in the consolidated statements of operations. For the year ended December 31, 2025, interest and penalties totaled a benefit of approximately $2.5 million and for the years ended December 31, 2024 and 2023, totaled an expense of approximately $0.7 million and $2.6 million, respectively. Accrued interest and penalties related to uncertain tax positions were $5.3 million and $7.8 million as of December 31, 2025 and 2024, respectively. The effect on the Company’s tax rate if it were to recognize its gross unrecognized tax benefits as of December 31, 2025 approximates $63.8 million, including interest and penalties. While it is possible that there could be audit settlements and/or lapses in certain statutes of limitation relating to uncertain tax positions, management has determined that it is too difficult to predict the outcome of such matters. The IRS has examined the Company’s federal income tax returns through 2017. Certain foreign and state taxing authorities are examining various years. The final outcome of these examinations is not yet determinable. With few exceptions, as of December 31, 2025, the Company is no longer subject to state examinations by taxing authorities for years before 2020. On July 4, 2025, new tax legislation was signed into law, known as the One Big Beautiful Bill Act (the “OBBBA”), which makes permanent many of the tax provisions enacted in 2017 as part of the TCJA that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The Company incorporated the provisions of the new law in preparing its financial statements for the year ended December 31, 2025, which did not have a material impact on its effective annual tax rate.

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