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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income before income taxes by geographic area was, for the years ended December 31:
(in thousands)202420232022
Federal$64,068 $102,014 $104,185 
Foreign(17,575)22,990 10,019 
$46,493 $125,004 $114,204 
Income tax expense consisted of the following for the years ended December 31:
(in thousands)202420232022
Current
Federal$11,437 $21,337 $13,948 
Foreign1,788 1,821 2,148 
State3,405 7,348 5,154 
16,630 30,506 21,250 
Deferred
Federal4,917 (159)7,739 
Foreign(8,318)3,984 465 
State3,001 (317)1,369 
(400)3,508 9,573 
Income tax expense$16,230 $34,014 $30,823 
The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate for operations were as follows for the years ended December 31:
202420232022
U.S federal statutory rate21.0 %21.0 %21.0 %
State income taxes, net of U.S. federal income tax expense10.3 4.4 4.5 
Change in valuation allowance0.1 — — 
Tax differential on foreign earnings(2.0)0.7 0.6 
Non-deductible meals and entertainment1.6 0.5 0.2 
Stock compensation excess tax benefits(4.6)(2.6)(2.4)
Uncertain tax positions(0.5)— 0.1 
Provision to return adjustments, net0.6 0.7 0.7 
Section 162(m) limitation10.6 2.5 2.4 
Tax credits(0.6)— — 
Other income, net(1.6)— (0.1)
Effective rate34.9 %27.2 %27.0 %
The net deferred tax assets and (liabilities) arising from temporary differences was as follows at December 31:
(in thousands)20242023
Deferred income tax assets:
Self-insurance reserves$1,498 $3,850 
Contract loss reserves2,076 2,273 
Stock-based awards3,521 3,336 
Bonus10,128 11,137 
Accrued vacation2,653 2,295 
Accrued profit sharing161 1,707 
Operating lease liabilities11,126 8,115 
Non-U.S. operating loss13,166 2,411 
Other3,064 1,090 
Total deferred income tax assets before valuation allowances47,393 36,214 
Less: valuation allowances(2,247)(2,412)
Total deferred income tax assets45,146 33,802 
Deferred income tax liabilities:
Property and equipment — tax over book depreciation(48,194)(45,332)
Non-U.S. intangible assets — tax over book amortization(9,601)(10,363)
Intangible assets — tax over book amortization(5,200)(4,013)
Right-of-use operating lease assets(11,129)(8,115)
Non-U.S. deferred income tax liabilities— (8,819)
Contract revenue adjustment(17,303)(4,790)
Other(483)(600)
Total deferred income tax liabilities(91,910)(82,032)
Net deferred income taxes$(46,764)$(48,230)
The Company determined that it is more-likely-than-not that it will not realize certain deferred tax assets related to net operating loss carryforwards on certain Canadian subsidiaries and therefore recorded a valuation allowance against the deferred tax assets for those entities.
Earnings from the Company’s Canadian subsidiaries are indefinitely reinvested in Canada, therefore as of December 31, 2024, the Company had no undistributed earnings or withholding deferral associated with its Canadian subsidiaries.
The Company is subject to taxation in various jurisdictions. The Company’s 2020 through 2023 tax returns are subject to examination by U. S. federal authorities. The Company’s tax returns are subject to examination by various state authorities for the years 2019 through 2023.
The Company has recorded a liability for unrecognized tax benefits related to tax positions taken on its various income tax returns. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate that is reported in future periods. The decrease in the unrecognized tax benefits as of December 31, 2024 was primarily due to the lapses in the applicable statutes of limitations. The total unrecognized tax benefits is expected to be reduced by less than $0.2 million within the next 12 months. Interest and penalties related to uncertain income tax positions are included as a component of income tax expense in the Financial Statements.
The following is a reconciliation of the beginning and ending liability for unrecognized tax benefits at December 31:
(in thousands)20242023
Balance at beginning of period$417 $390 
Gross increases (decreases) in current period tax positions(122)54 
Reductions in tax positions due to lapse of statutory limitations(30)(27)
Balance at end of period265 417 
Accrued interest and penalties at end of period24 107 
Total liability for unrecognized tax benefits$289 $524 
The liability for unrecognized tax benefits, including accrued interest and penalties, was included in other liabilities on the accompanying consolidated balance sheets. The amount of interest and penalties charged or credited to income tax expense as a result of the unrecognized tax benefits was not significant in the years ended December 31, 2024, 2023 and 2022.