Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income taxes |
7. INCOME TAXES We record income taxes for interim periods based on an estimated annual effective tax rate. The estimated annual effective rate is recomputed on a quarterly basis and may fluctuate due to changes in forecasted annual operating income, positive or negative changes to the valuation allowance for net deferred tax assets and changes to actual or forecasted permanent book to tax differences. Our effective tax rate for the six months ended June 30, 2025 was negative 4.1%, compared with 27.2% in the same period in 2024. For the six months ended June 30, 2025, our income tax provision included a discrete expense of approximately $4 million related to a book-tax difference on the sale of certain gas conditioning equipment to Flotek. Excluding this discrete item, the difference between our effective tax rate and the federal statutory rate related to changes in the valuation allowance on our net deferred tax assets. For the six months ended June 30, 2024, our income tax provision included a discrete benefit of $27.4 million related to the release of a portion of the valuation allowance on our net deferred tax assets. This discrete item was caused by the assumption of a $27.4 million deferred tax liability in our acquisition of AST, which made it more likely than not that we would be able to utilize a corresponding amount of our deferred tax assets. Excluding this discrete item, the difference between our effective tax rate and the federal statutory rate related to changes in the valuation allowance on our net deferred tax assets. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA contains, among other provisions, certain changes to U.S. federal income tax laws. The accounting for changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. As such, we will continue to evaluate this legislation and will record any related adjustments in the third quarter of 2025. We believe that the effects of this legislation will be immaterial to our unaudited condensed consolidated financial statements due to the valuation allowance on our net deferred tax assets. |