Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Domestic and Foreign Income Taxes
The following table sets forth components of income before income taxes: 
Year Ended December 31,
  2022 2021 2020
Domestic $ 98,004  $ 74,256  $ 52,595 
Foreign 7,715  3,888  3,833 
Income before income taxes $ 105,719  $ 78,144  $ 56,428 
Income Tax Provision (Benefit)
The components of the provision (benefit) for income taxes were as follows: 
Year Ended December 31,
  2022 2021 2020
Current income tax provision (benefit):          
Federal $ (722) $ (779) $ (4,566)
State 733  1,779  1,522 
Foreign 1,202  844  298 
Total current 1,213  1,844  (2,746)
Deferred income tax provision (benefit):
Federal 2,528  (8,025) 3,655 
State 2,300  3,561  2,207 
Foreign 1,129  573  (3,610)
Total deferred 5,957  (3,891) 2,252 
Total income tax provision (benefit) $ 7,170  $ (2,047) $ (494)
Deferred Income Tax Assets and Liabilities
Deferred tax assets and liabilities consisted of the following:
December 31,
  2022 2021
Deferred income tax assets:      
Compensation accruals $ 3,306  $ 2,570 
Reserves 4,111  4,150 
Sale-leasebacks and other accruals 32,945  27,806 
Net operating losses 18,395  28,807 
Interest rate swaps —  1,928 
Energy efficiency 71,433  59,618 
Deferred revenue 2,132  2,181 
Gross deferred income tax assets 132,322  127,060 
Valuation allowance (3,621) (4,039)
Total deferred income tax assets $ 128,701  $ 123,021 
Deferred income tax liabilities:
Depreciation $ (122,762) $ (112,896)
Deferred effect of derivative liability (1,640) (1,541)
Canadian capital cost, allowance and amortization (3,098) (984)
United Kingdom goodwill amortization (952) (718)
Outside basis difference (5,038) (7,050)
Interest rate swaps (1,347) — 
Total deferred income tax liabilities (134,837) (123,189)
Deferred income tax liabilities, net $ (6,136) $ (168)
Summary of Valuation Allowance
Our valuation allowance related to the following items:
December 31,
2022 2021
Interest rate swaps (1)
$ 49  $ 50 
Foreign net operating loss (2)
3,555  3,724 
State net operating loss at one of our subsidiaries (3)
17  265 
Total valuation allowance $ 3,621  $ 4,039 
(1) The deferred tax asset represents a future capital loss which can only be recognized for income tax purposes to the extent of capital gain income. Although we anticipate sufficient future taxable income, it is more likely than not that it will not be the appropriate character to allow for the recognition of the future capital loss.
(2) It is more likely than not that we will not generate sufficient taxable income at the foreign subsidiary level to utilize the net operating loss.
(3) It is more likely than not that we will not generate sufficient taxable income at the subsidiary level to utilize the net operating loss.
Summary of Operating Loss Carryforwards
As of December 31, 2022, we had the following tax loss and credit carryforwards to offset taxable income in prior and future years:
Amount Expiration Period
Federal net operating loss carryforwards $ 46,070  Indefinite
State net operating loss carryforwards 31,109   Various
Canadian net operating loss carryforwards 24,699  2028 through 2042
Ireland net operating loss carryforwards 754  Indefinite
Greece net operating loss carryforwards 136  2027
Spain net operating loss carryforwards 2,302  Indefinite
Total tax loss carryforwards $ 105,070 
Federal Energy Investment and Production tax credit carryforward $ 71,373 
2030 through 2042
Summary of Tax Credit Carryforwards
As of December 31, 2022, we had the following tax loss and credit carryforwards to offset taxable income in prior and future years:
Amount Expiration Period
Federal net operating loss carryforwards $ 46,070  Indefinite
State net operating loss carryforwards 31,109   Various
Canadian net operating loss carryforwards 24,699  2028 through 2042
Ireland net operating loss carryforwards 754  Indefinite
Greece net operating loss carryforwards 136  2027
Spain net operating loss carryforwards 2,302  Indefinite
Total tax loss carryforwards $ 105,070 
Federal Energy Investment and Production tax credit carryforward $ 71,373 
2030 through 2042
Reconciliation of Effective Tax Rates
The following is a reconciliation of the effective tax rates:
Year Ended December 31,
  2022   2021   2020
Income before provision (benefit) for income taxes $ 105,719    $ 78,144  $ 56,428 
Federal statutory tax expense $ 22,201    $ 16,410  $ 11,850 
State income taxes, net of federal benefit 3,844    2,648  2,257 
Net state impact of deferred rate change (575)   (502) (29)
Nondeductible expenses 2,198    2,572  987 
Impact of reserve for uncertain tax positions 59  286  (124)
Stock-based compensation expense 353    (4,618) (2,922)
Energy efficiency preferences (21,410)   (17,639) (8,595)
Foreign items and rate differential 37    4  160 
Redeemable non-controlling interests (411) (2,546) (767)
Valuation allowance (159) 337  (4,308)
Miscellaneous 1,033    1,001  997 
Total income tax provision (benefit) $ 7,170    $ (2,047)   $ (494)
Effective tax rate:          
Federal statutory rate expense 21.0  % 21.0  % 21.0  %
State income taxes, net of federal benefit 3.6  % 3.4  % 4.0  %
Net state impact of deferred rate change (0.5) % (0.6) % (0.1) %
Nondeductible expenses 2.1  % 3.3  % 1.7  %
Impact of reserve for uncertain tax positions 0.1  % 0.4  % (0.2) %
Stock-based compensation expense 0.3  % (5.9) % (5.2) %
Energy efficiency preferences (20.3) % (23.2) % (15.2) %
Foreign items and rate differential —  % —  % 0.3  %
Redeemable non-controlling interests (0.4) % (3.3) % (1.4) %
Valuation allowance (0.2) % 0.4  % (7.6) %
Miscellaneous 1.1  % 1.9  % 1.8  %
Effective tax rate 6.8  % (2.6) % (0.9) %
Unrecognized Tax Benefits
The following table provides a reconciliation of gross unrecognized tax benefits which are included in other liabilities within the consolidated balance sheets:
Year Ended December 31,
  2022   2021
Balance, beginning of year $ 900  $ 600 
Additions for current year tax positions —  300 
Balance, end of year $ 900  $ 900