v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
4. Income Taxes
At the end of each interim period, we make our best estimate of the annual effective tax rate and the impact of discrete items, if any, and adjust the rate as necessary.
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
(Dollars in millions)
Income before income tax expense$4.4 $28.9 $29.4 $57.1 
Income tax expense0.9 5.6 6.5 12.7 
Effective tax rate20.5 %19.4 %22.1 %22.2 %
Income taxes recorded during the three and six months ended June 30, 2025 included immaterial discrete items. Income taxes recorded for the three and six months ended June 30, 2024 reflect discrete items recorded. During the three months ended June 30, 2024, the Company released a valuation allowance established on the deferred tax assets attributable to existing state net operating losses (“NOLs”) carryforwards, resulting in a deferred tax benefit of $2.2 million. The release of the aforementioned valuation allowance was a result of tax planning conducted by the Company, as the state NOLs carried forward from prior years are now expected to be utilized. Income tax expense also reflects the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates, which resulted in income tax expense of $1.9 million for the three months ended June 30, 2024.
Before the impact of the discrete items mentioned above, the Company's effective tax rate was 20.5 percent and 22.1 percent for the three and six months ended June 30, 2025, respectively, and 20.5 percent and 22.7 percent for the three and six months ended June 30, 2024, respectively. The difference between the Company's effective tax rates and federal statutory rate of 21.0 percent during all periods presented reflect the impact of state taxes, compensation deduction limitations under Section 162(m) of the Internal Revenue Code and a valuation allowance established for unused foreign tax credits, offset by earnings attributable to its noncontrolling ownership interests in a partnership. The three and six months ended June 30, 2024 also reflects the valuation allowance released for a portion of state NOLs utilization projected for the current period as a result of tax planning.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We expect these legislative changes could have a favorable impact on our future cash taxes but continue to evaluate the impact of the OBBBA on the consolidated financial statements. The estimated impact of the OBBBA to the Company is a decrease in our cash taxes in 2025.