For the
three months
ended March
31, 2026,
the Company
estimated its
annual effective
tax rate
and applied
this effective tax
rate to its year-to-date
pretax income at
the end of the interim
reporting period. The
tax effects
of
unusual
or
infrequently
occurring
items,
including
effects
of
changes
in
tax
laws
or
rates
and
changes
in
judgment about the realizability of deferred tax assets, are reported
in the interim period in which they occur.
The Company’s 2026 estimated annual
effective tax rate is
3.5
%. This rate is impacted by
inclusion of a current
year valuation
allowance relating
to both
the Australia
and the U.S.
operations. Accordingly,
the Company
had
an income
tax benefit
of $
11.5
million based
on a
loss before
tax of
$
330.1
million for
the three
months ended
March 31, 2026, which includes discrete expense of $
0.4
The Company
had
an income
tax
benefit of
$
37.8
million based
on a
loss
before tax
of $
134.0
three months ended March 31, 2025.
The Company utilizes the
“more likely than not”
standard in recognizing
a tax benefit in
its financial statements.
For the three months ended
March 31, 2026, the Company
had
no
new unrecognized tax benefits included in
tax
expense. If accrual
for interest or
penalties is required,
it is the
Company’s policy to include
these as a
component
of income tax
expense. The Company continues
to carry an unrecognized
tax benefit of $
19.3
31, 2026 and December 31, 2025.
The Company is
subject to taxation
in the
U.S. and its
various states, as
well as Australia
and its
various localities.
In the
U.S.
and
Australia, the
first tax
return
was
lodged for
the
year
ended December
31,
2018. In
the U.S.,
companies are subject to
open tax audits for
a period of three years
at the federal level
and five years at
the state
level.
In
Australia,
companies
are
subject
to
open
tax
audits
for
a
period
of
four
years
from
the
date
of
assessment.