Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income (loss) before income taxes is summarized as follows:

	Year Ended December 31,
(in thousands)	2022		2021		2020
United States operations	$	(288,954)	$	118,749	$	138,426
Foreign and U.S. territory operations	21,284		41,033		35,853
Total	$	(267,670)	$	159,782	$	174,279

The income tax expense (benefit) is as follows:

	Year Ended December 31,
(in thousands)	2022		2021		2020
Current expense (benefit):
Federal	$	(1,653)	$	20,052	$	(36,159)
State	930		7,899		(1,282)
Foreign and U.S. territories	5,074		11,568		11,130
Total current expense (benefit):	4,351		39,519		(26,311)
Deferred expense (benefit):
Federal	(54,526)		(13,667)		38,667
State	(25,395)		36		10,608
Foreign and U.S. territories	472		(256)		(1,022)
Total deferred expense (benefit):	(79,449)		(13,887)		48,253
Total expense (benefit):	$	(75,098)	$	25,632	$	21,942

The following table is a reconciliation of the Company’s income tax provision at the statutory federal tax rate to the Company’s effective tax rate:

	Year Ended December 31,
	2022				2021				2020
(dollars in thousands)	Amount		Rate		Amount		Rate		Amount		Rate
Federal income tax expense (benefit) at statutory tax rate	$	(56,211)	21.0	%	$	33,554	21.0	%	$	36,599	21.0	%
State income taxes, net of federal tax benefit	(21,784)		8.1		8,301		5.2		8,518		4.9
Stock based compensation	1,227		(0.5)		87		0.1		3,185		1.8
Impact of federal tax law changes	—		—		—		—		(14,476)		(8.3)
Officers' compensation	2,840		(1.1)		3,664		2.3		2,486		1.4
Noncontrolling interests	(3,861)		1.4		(8,872)		(5.6)		(9,799)		(5.6)
Federal R&D credits	128		—		(1,105)		(0.7)		(3,007)		(1.7)
Foreign tax rate differences	(1,438)		0.5		(625)		(0.4)		1,491		0.9
Federal claim of right credit	—		—		(8,191)		(5.1)		—		—
Valuation allowance	7,991		(3.0)		—		—		—		—
Other	(3,990)		1.7		(1,181)		(0.8)		(3,055)		(1.8)
Income tax expense (benefit)	$	(75,098)	28.1	%	$	25,632	16.0	%	$	21,942	12.6	%

The Company’s provision for income taxes and effective tax rate for the year ended December 31, 2021 was favorably impacted by a federal claim of right tax credit resulting in a tax rate adjustment associated with an adverse 2019 jury verdict that rendered certain income recognized in 2016 at a 35% federal statutory income tax rate to be reversed in 2019 at a 21% federal statutory income tax rate.

The Company's provision for income taxes and effective tax rate for the year ended December 31, 2020 was significantly impacted by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) that was signed into law on March 27, 2020. A provision in the CARES Act allowed net operating losses from the 2018, 2019 and 2020 tax years to be carried back up to five years. As a result, for the year ended December 31, 2020, the Company recognized tax benefits from carrying back its net operating tax loss generated in 2019 at a 21% federal statutory income tax rate to prior tax years when the federal statutory income tax rate was 35%.

The following is a summary of the significant components of the deferred tax assets and liabilities:

	As of December 31,
(in thousands)	2022		2021
Deferred tax assets:
Timing of expense recognition	$	49,939	$	28,710
Net operating losses	82,210		15,824
Goodwill	6,022		11,698
Other, net	24,105		13,125
Deferred tax assets	162,276		69,357
Valuation allowance	(8,846)		—
Net deferred tax assets	153,430		69,357
Deferred tax liabilities:
Intangible assets, due primarily to purchase accounting	(16,850)		(16,453)
Fixed assets	(66,130)		(70,128)
Construction contract accounting	(7,940)		(9,196)
Joint ventures	(32,983)		(26,764)
Other	(18,266)		(15,672)
Deferred tax liabilities	(142,169)		(138,213)
Net deferred tax assets (liabilities)	$	11,261	$	(68,856)

As of December 31, 2022, the Company had federal and various state net operating loss carryforwards of $206.9 million and $431.0 million, respectively. Federal net operating loss carryforwards do not have expiration dates, whereas the state net operating loss carryforwards have expiration dates ranging from 2023 to 2042. As of December 31, 2021, the Company had net operating loss carryforwards in various states totaling $166.0 million. As of December 31, 2022, the Company had federal and state tax credit carryforwards of approximately $3.9 million and $3.6 million, respectively. As of December 31, 2021, the Company had federal and state tax credit carryforwards of approximately $0.1 million and $2.6 million, respectively. The Company established a valuation allowance in 2022 as a result of the uncertainty with the future realization of certain carryforwards for capital losses, foreign tax credits and state net operating losses.

The net deferred tax assets (liabilities) are presented in the Consolidated Balance Sheets as follows:

	As of December 31,
(in thousands)	2022		2021
Deferred tax assets	$	15,910	$	2,133
Deferred tax liabilities	(4,649)		(70,989)
Net deferred tax assets (liabilities)	$	11,261	$	(68,856)

The Company’s policy is to record interest and penalties on unrecognized tax benefits as an element of income tax expense. The cumulative amounts related to interest and penalties are added to the total unrecognized tax liabilities on the balance sheet. The total amount of gross unrecognized tax benefits as of December 31, 2022 that, if recognized, would impact the effective tax rate is $7.5 million. The Company does not expect any significant release of unrecognized tax benefits within the next twelve months.

The Company accounts for its uncertain tax positions in accordance with GAAP. The following is a reconciliation of the beginning and ending amounts of these unrecognized tax benefits for the three years ended December 31, 2022:

	As of December 31,
(in thousands)	2022		2021		2020
Beginning balance	$	7,539	$	8,681	$	5,682
Change in tax positions of prior years	(416)		(1,319)		2,286
Change in tax positions of current year	625		1,000		1,202
Reduction in tax positions for statute expirations	(223)		(823)		(489)
Ending balance	$	7,525	$	7,539	$	8,681

The Company conducts business internationally and, as a result, one or more of its subsidiaries files income tax returns in U.S. federal, U.S. state and certain foreign jurisdictions. Accordingly, in the normal course of business, the Company is subject to examination by taxing authorities principally throughout the United States, Guam and Canada. The Company's open tax years for a U.S. federal income tax audit are 2018 and later. The 2018 federal income tax return is currently under audit by the Internal Revenue Service. The Company has various years open to audit in a number of state and local jurisdictions and is currently under audit by various state and local taxing authorities.