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Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
Note 17 - Income Taxes
Three Months Ended March 31,
20262025
Income tax expense (benefit)
$0.3 $(13.0)
Income before income taxes
$7.9 $9.1 
Effective tax rate3.7 %(142.9)%
Income tax expense for the three months ended March 31, 2026 includes a full quarter of income tax expense attributed to the U.S. jurisdiction whereas in the prior year quarter no such U.S. jurisdiction income tax expense was recognized due to a full valuation allowance against U.S. federal deferred tax assets. For the three months ended March 31, 2025, the $13.0 million income tax benefit includes the recognition of a $13.3 million benefit due to the favorable resolution of a prior-year uncertain tax position.
Following the release of a significant portion of our valuation allowance as of December 31, 2025 ($120.1 million), our annual effective tax rate for the year ended December 31, 2026 is expected to exceed the 21% federal statutory income tax rate primarily due to state taxes and the disallowance of certain executive compensation expenses.
As of March 31, 2026, we believe that the weight of the positive evidence outweighs the negative evidence regarding the realization of our U.S. federal deferred tax assets, including cumulative income in recent years, continued profitability, and expectations regarding future profitability. As of March 31, 2026, for certain U.S. state net operating losses and interest expense disallowance carryforwards, we believe the weight of the negative evidence continues to outweigh the positive evidence regarding the realization of these state deferred tax assets and as a result are not considered to be more likely than not realizable; therefore, we have maintained a valuation allowance against these assets.
The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income. We conduct periodic evaluations of positive and negative evidence to determine whether it is more likely than not that the deferred tax asset can be realized in future periods. In these evaluations, we give more significant weight to objective evidence, such as our actual financial condition and historical results of operations, as compared to subjective evidence, such as projections of future taxable income or losses. Other factors considered in these evaluations are future reversals of temporary differences, tax character and the impact of tax planning strategies that may be implemented, if warranted.
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