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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14. Income Taxes: For the years ended December 31, 2024, 2023 and 2022, domestic and foreign pretax income, before noncontrolling interests, were $83.2 million and $82.2 million, $193.4 million and $81.0 million, and $268.0 million and $57.7 million, respectively. Income taxes are summarized as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in millions) |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (0.7 | ) |  | $ | 55.4 |  |  | $ | 132.3 |
State |  |  | 6.1 |  |  |  | 2.8 |  |  |  | 18.5 |
Foreign |  |  | 17.3 |  |  |  | 11.6 |  |  |  | 18.3 |
|  |  | 22.7 |  |  |  | 69.8 |  |  |  | 169.1 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 21.4 |  |  |  | (8.6 | ) |  |  | (80.3 | )
State |  |  | (16.6 | ) |  |  | (10.9 | ) |  |  | (25.2 | )
Foreign |  |  | 5.3 |  |  |  | 8.6 |  |  |  | (3.2 | )
|  |  | 10.1 |  |  |  | (10.9 | ) |  |  | (108.7 | )
|  | $ | 32.8 |  |  | $ | 58.9 |  |  | $ | 60.4 |
The Company’s actual income tax expense differs from the expense computed by applying the federal income tax rate of 21% for the years ended December 31, 2024, 2023 and 2022. A reconciliation of these differences is as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (dollars in millions) |
Taxes calculated at federal rate |  | $ | 34.7 |  |  |  | 21.0 | % |  | $ | 57.6 |  |  |  | 21.0 | % |  | $ | 68.4 |  |  |  | 21.0 | %
State taxes, net of federal benefit |  |  | (8.3 | ) |  |  | (5.0 | ) |  |  | (6.4 | ) |  |  | (2.3 | ) |  |  | (5.3 | ) |  |  | (1.5 | )
Change in liability for tax positions |  |  | 6.8 |  |  |  | 4.1 |  |  |  | 10.7 |  |  |  | 3.9 |  |  |  | (0.8 | ) |  |  | (0.3 | )
Foreign income taxed at different rates |  |  | 8.6 |  |  |  | 5.2 |  |  |  | 9.5 |  |  |  | 3.5 |  |  |  | 2.1 |  |  |  | 0.6 |
Unremitted foreign earnings |  |  | (1.4 | ) |  |  | (0.8 | ) |  |  | 1.2 |  |  |  | 0.4 |  |  |  | — |  |  |  | — |
Federal tax credits |  |  | (14.6 | ) |  |  | (8.8 | ) |  |  | (17.3 | ) |  |  | (6.3 | ) |  |  | — |  |  |  | — |
Valuation allowance |  |  | 11.4 |  |  |  | 6.9 |  |  |  | 7.7 |  |  |  | 2.8 |  |  |  | — |  |  |  | — |
Other items, net |  |  | (4.4 | ) |  |  | (2.8 | ) |  |  | (4.1 | ) |  |  | (1.5 | ) |  |  | (4.0 | ) |  |  | (1.1 | )
|  | $ | 32.8 |  |  |  | 19.8 | % |  | $ | 58.9 |  |  |  | 21.5 | % |  | $ | 60.4 |  |  |  | 18.7 | %
The Company’s effective income tax rates (income tax expense as a percentage of income before income taxes) were 19.8%, 21.5%, and 18.7% for the years ended December 31, 2024, 2023, and 2022, respectively. The effective income tax rates differ from the federal statutory rate as a result of state and foreign income taxes for which the Company is liable, as well as permanent differences between amounts reported for financial statement purposes and amounts reported for income tax purposes, including the recognition of excess tax benefits or tax deficiencies associated with share-based payment transactions through income tax expense. The effective income tax rates also reflect the impact on pretax earnings from impairment losses on the Company’s venture investment portfolio and, for 2024, realized losses from sales of debt securities in an unrealized loss position in connection with the Company’s portfolio rebalancing project. In addition, the effective income tax rates for 2024 and 2023 reflect tax credits claimed in current and prior years and a valuation allowance recorded against losses on certain equity investments. The effective income tax rate for 2022 also reflects the benefits from the resolution of state tax matters from prior years. The primary components of temporary differences that give rise to the Company’s net deferred tax liability are as follows:
|  | December 31, |
|  | 2024 |  |  | 2023 |
|  | (in millions) |
Deferred tax assets: |  |  |  |  |  |
Deferred revenue |  | $ | 10.4 |  |  | $ | 8.6 |
Employee benefits |  |  | 103.9 |  |  |  | 101.1 |
Bad debt reserves |  |  | 7.9 |  |  |  | 8.7 |
Pension |  |  | 11.3 |  |  |  | 13.3 |
Net operating loss carryforward |  |  | 27.6 |  |  |  | 21.8 |
Foreign tax credit |  |  | 3.5 |  |  |  | 3.8 |
Operating lease liabilities |  |  | 47.1 |  |  |  | 52.3 |
Investments in affiliates |  |  | 17.2 |  |  |  | 13.9 |
Securities |  |  | 124.1 |  |  |  | 189.7 |
Other |  |  | 17.5 |  |  |  | 12.2 |
|  |  | 370.5 |  |  |  | 425.4 |
Valuation allowance |  |  | (27.9 | ) |  |  | (13.7 | )
|  |  | 342.6 |  |  |  | 411.7 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciable and amortizable assets |  |  | 264.6 |  |  |  | 275.8 |
Claims and related salvage |  |  | 119.2 |  |  |  | 88.5 |
Operating lease assets |  |  | 43.2 |  |  |  | 47.7 |
Unremitted foreign earnings |  |  | 10.9 |  |  |  | 13.2 |
|  |  | 437.9 |  |  |  | 425.2 |
Net deferred tax liability |  | $ | 95.3 |  |  | $ | 13.5 |
Effective in 2024, the Company is subject to international anti-base erosion rules that assess a minimum tax rate of 15% in the jurisdictions in which it operates. Commonly known as “Pillar II,” these rules apply to large multinational enterprises and are designed to address the tax challenges arising from the globalization and digitalization of the economy. The Company has calculated the minimum tax on a jurisdiction-by-jurisdiction basis and has determined that the resulting tax is not material to its financial results. The vesting of RSUs represents a tax benefit that has been reflected as a reduction to income taxes payable and income tax expense for the years ended December 31, 2024, 2023 and 2022. The benefits recorded were $0.3 million, $0.7 million and $2.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. At December 31, 2024, the Company had available a $3.2 million foreign tax credit carryover, net of a valuation allowance, and expects to utilize this credit within the carryover period. At December 31, 2024, the Company had available net operating loss carryforwards for income tax purposes totaling $383.1 million, consisting of federal, state and foreign losses of $38.4 million, $332.7 million and $12.0 million, respectively. Of the aggregate net operating losses, $68.1 million has an indefinite expiration and $315.0 million will begin to expire in various years starting in 2028. The Company evaluates the realizability of its deferred tax assets by assessing the valuation allowance and makes adjustments to the allowance as necessary. The factors used by the Company in assessing the likelihood of realization of its deferred tax assets include forecasts of future taxable income and available tax planning strategies that could be implemented. The Company’s ability to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of its deferred tax assets. At December 31, 2024 and 2023, the Company carried a valuation allowance of $27.9 million and $13.7 million, respectively. The balances as of December 31, 2024 and 2023 include $24.7 million and $9.6 million related to capital losses, $2.9 million and $3.0 million related to net operating losses, and $0.3 million and $1.1 million related to other deferred tax assets, respectively. The increase in the overall valuation allowance during 2024 was primarily due to the Company’s assessment of its ability to realize tax benefits related to capital losses on certain equity investments. Based on future operating results in certain jurisdictions, it is possible that the current valuation allowance positions of those jurisdictions could be adjusted during the next 12 months. As of December 31, 2024, 2023 and 2022, the liability for income taxes associated with uncertain tax positions was $31.6 million, $12.4 million and $3.2 million, respectively. The net increases in the liability in 2024 from 2023 and in 2023 from 2022 were primarily attributable to positions taken on the Company’s tax returns for current and prior years. The liabilities could be reduced by $3.7 million, $0.8 million and $2.2 million as of December 31, 2024, 2023 and 2022, respectively, due to offsetting tax benefits associated with the correlative effects of potential adjustments, including timing adjustments, and state income taxes. The net liability, if recognized, would favorably affect the Company’s effective income tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022 is as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
|  | (in millions) |
Unrecognized tax benefits—beginning balance |  | $ | 12.4 |  |  | $ | 3.2 |  |  | $ | 7.9 |
Gross increases (decreases)—prior period tax positions |  |  | 14.8 |  |  |  | 8.4 |  |  |  | (0.2 | )
Gross increases—current period tax positions |  |  | 4.4 |  |  |  | 5.2 |  |  |  | 0.8 |
Settlements with taxing authorities |  |  | — |  |  |  | (4.4 | ) |  |  | (5.3 | )
Unrecognized tax benefits—ending balance |  | $ | 31.6 |  |  | $ | 12.4 |  |  | $ | 3.2 |
The Company’s continuing practice is to recognize interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties, net of tax benefits, related to uncertain tax positions as of December 31, 2024, 2023, and 2022, were not material. The Company, or one of its subsidiaries, files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and in various non-U.S. jurisdictions. The primary non-federal jurisdictions are California, Canada, India and the United Kingdom. As of December 31, 2024, the Company is generally no longer subject to income tax examinations for U.S. federal, state and non-U.S. jurisdictions for years prior to 2021, 2019 and 2014, respectively. It is reasonably possible that the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions may increase or decrease within the next 12 months. Any such change may be the result of either ongoing audits or the expiration of federal and state statutes of limitations for the assessment of taxes. The Company records a liability for potential tax assessments based on its estimate of the potential exposure. New tax laws and new interpretations of laws and rulings by taxing authorities may affect the liability for potential tax assessments. Due to the subjectivity and complex nature of the underlying issues, actual payments or assessments may differ from estimates. To the extent that the Company’s estimates differ from actual payments or assessments, income tax expense could change. The Company’s income tax returns in several jurisdictions are being examined by various taxing authorities. The Company believes that adequate amounts of tax and related interest from any adjustments that may result from these examinations have been provided for.

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