| Schedule of Income Tax Expense and Effective Tax Rate |
The following table summarizes the Company's income tax expense and effective tax rate for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended
September 30, | | Nine Months Ended
September 30, | | 2026 | 2025 | | 2026 | | 2025 | | | | | | | | | | (in thousands) | Income (loss) before provision for income taxes | $27,025 | | $29,301 | | $(331,151) | | $88,532 | | Provision for income taxes | $26,251 | | $53,036 | | $70,077 | | $160,220 | | Effective tax rate | 97% | | 181% | | (21)% | | 181% | | | | | | | | |
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| Schedule of Unrecognized Tax Benefits Roll Forward |
The following table summarizes a reconciliation of the beginning and ending amount of unrecognized tax benefits for the periods presented:
| | | | | | | | | | | | | September 30, 2026 | | Three Months Ended | | Nine Months Ended | | | | | | (in thousands) | | Balance, beginning of period | $ | 649,425 | | | $ | 808,631 | | | Reductions based on tax positions related to the prior years | — | | | (8,912) | | | | | | | Reductions based on Deconsolidation Transaction | — | | | (150,119) | | | Reductions based on tax positions related to the current year | — | | | (175) | | | Additions based on tax positions related to the prior years | 3 | | | 3 | | | | | | | Balance, end of period | $ | 649,428 | | | $ | 649,428 | |
The following table summarizes a reconciliation of the beginning and ending amount of uncertain tax position liabilities, net for the periods presented:
| | | | | | | | | | | | | September 30, 2026 | | Three Months Ended | | Nine Months Ended | | | | | | (in thousands) | | Balance, beginning of period | $ | 598,187 | | | $ | 668,375 | | | | | | | | | | | | | | | Reductions recognized as part of the Deconsolidation Transaction | — | | | (131,143) | | | Additions based on tax positions related to the prior years | 3 | | | 2,042 | | | | | | | | | | | Reclass tax payments on deposit | 9,322 | | | 33,102 | | Interest recorded in income tax expense, net of reversals (1) | 17,856 | | | 52,992 | | | | | | Balance, end of period (2) (3) | $ | 625,368 | | | $ | 625,368 | |
| | | | | | | | (1) Amounts represent interest related to uncertain tax positions recognized during the respective periods and recorded as a component of income tax expense in the Condensed Consolidated Statements of Operations. The Company records accrued interest associated with uncertain tax positions, including those related to Internal Revenue Code ("IRC") Section 280E. As outlined in "Part II, Item 1. Legal Proceedings", the Company believes its tax position is supportable and that it has substantive legal arguments. However, management has concluded that the position does not yet meet the recognition threshold required by ASC 740 Income Taxes ("ASC 740"). | (2)The Company has taken a position that IRC Section 280E does not preclude it from deducting ordinary and necessary business expenditures on its tax return. Of the $625.4 million in uncertain tax position liabilities, net, $610.0 million is related to this tax position. The amount does not include $55.8 million of previous tax payments for which the Company has claimed overpayment related to this tax position. | (3) The ending balance includes accrued interest of $104.8 million as of September 30, 2026. Of the $104.8 million in accrued interest, $100.9 million relates to the Company's IRC Section 280E tax position. |
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