Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Income tax expense during interim periods is based on the estimated annual effective income tax rate plus any discrete items that are recorded in the period in which they occur. The Company's tax rate is affected by discrete items that may occur in any given year but may not be consistent from year to year.
The Company's effective tax rate for continuing operations was 37.5% and 18.7% for the three and nine months ended September 30, 2025 respectively, and 21.1% and 12.8% for the three and nine months ended September 30, 2024 respectively. The effective tax rates were higher for the three and the nine months ended September 30, 2025 compared to the same periods of the prior year primarily due to the recognition of an accrual for a potential tax dispute associated with the dissolution of a foreign subsidiary. Additionally, higher pre-tax book income in the nine months ended September 30, 2025 compared to the same period in 2024 reduced the favorable tax impact arising from various discrete tax adjustments in 2025.
The Company recorded higher deferred tax assets in 2025 as compared to 2024 primarily attributable to (i) the release of valuation allowance associated with tax attributes in connection with the Kellstrom acquisition, (ii) recognition of a deferred tax asset related to the fair value adjustment of the earn-out receivable, and (iii) accelerated recognition of a tax gain related to the Fleet Sale under the installment sale method.
On July 4, 2025, Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which includes several changes to the Internal Revenue Code that may result in changes to the Company’s income tax expense. The Company does not believe that changes in tax law will materially affect the Company’s operating performance, financial position or effective tax rate.
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