Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 9 — Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Effective income tax rates for interim periods are based upon the Company’s current estimated annual tax rate, which varies based upon the Company’s estimate of taxable earnings or loss and the mix of taxable earnings or loss in the various states in which the Company operates. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs.
As of June 30, 2026, the Company recorded a valuation allowance against its net deferred tax assets based on management's assessment of the realizability of those assets under ASC 740. In performing its quarterly assessment, management considered all available positive and negative evidence, including recent operating results, cumulative earnings history, expectations regarding future taxable income, the reversal of existing taxable temporary differences, and other relevant factors. Based on the weight of the available evidence as of June 30, 2026, management concluded that it was more likely than not that the Company's net deferred tax assets would not be realized and, accordingly, recorded a valuation allowance to reduce the net deferred tax assets to zero.
Income tax expense (benefit) was $ million and ($) million for the three months ended June 30, 2026 and 2025, respectively. Income tax expense (benefit) was $ million and ($) million for the six months ended June 30, 2026 and 2025, respectively.
The effective tax rates for the three months ended June 30, 2026 and 2025 were (185.6%) and 41.1%, respectively. The effective tax rates for the six months ended June 30, 2026 and 2025 were (55.9%) and 14.5%, respectively. The decrease in the effective tax rate for the three months ended June 30, 2026 compared to the prior year period was primarily attributable to an increase in the valuation allowance. The decrease in the effective tax rate for the six months ended June 30, 2026 compared to the prior year period was primarily attributable to an increase in the valuation allowance.
The effective tax rate differs from the U.S. federal statutory rate for the three and six months ended June 30, 2026, primarily due to the increase in valuation allowance, nondeductible expenses, state income taxes and the favorable impact of tax credits.
As of June 30, 2026, the Company’s U.S. federal and certain state tax returns remain subject to examination, beginning with those filed for the year ended December 31, 2018. |