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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Taxes |
Income Taxes | [5] Income Taxes Income (Loss) before taxes is summarized as follows:
|  | U.S. |  | Foreign |  |  |
Year ended December 31, 2014 |  | Operations |  | Operations |  | Total
|  | (in thousands)
2014 |  | $ | 170,517 |  |  | 16,921 |  |  | 187,438
2013 |  | $ | 127,682 |  | $ | 11,933 |  | $ | 139,615
2012 |  | $ | (271,683) |  | $ | 3,841 |  | $ | (267,842)
The (benefit) provision for income taxes is as follows:
|  | Year ended December 31,
|  | 2014 |  | 2013 |  | 2012
|  | (in thousands)
Current expense: |  |  |  |  |  |  |  |  |
Federal |  | $ | 45,074 |  | $ | 29,034 |  | $ | 19,573
State |  |  | 11,174 |  |  | 9,018 |  |  | 3,508
Foreign |  |  | 3,203 |  |  | 4,256 |  |  | 1,542
Total current |  |  | 59,451 |  |  | 42,308 |  |  | 24,623
Deferred (benefit) expense: |  |  |  |  |  |  |  |  |
Federal |  |  | 9,992 |  |  | 9,547 |  |  | (28,157)
State |  |  | 10,059 |  |  | 577 |  |  | 1,104
Foreign |  |  | — |  |  | (113) |  |  | (12)
Total deferred |  |  | 20,051 |  |  | 10,011 |  |  | (27,065)
Total (benefit) provision |  | $ | 79,502 |  | $ | 52,319 |  | $ | (2,442)
The following table is a reconciliation of the Company’s provision (benefit) for income taxes at the statutory rates to the provision (benefit) for income taxes at the Company’s effective rate.
|  | 2014 |  | 2013 |  | 2012
|  | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
|  | (dollars in thousands)
Federal income expense (benefit) at statutory tax rate |  | $ | 65,603 |  | 35.0 | % |  | $ | 48,865 |  | 35.0 | % |  | $ | (93,745) |  | 35.0 | %
State income taxes, net of federal tax benefit |  |  | 10,367 |  | 5.5 |  |  |  | 6,236 |  | 4.5 |  |  |  | 3,214 |  | (1.2) |
Officers' compensation |  |  | 3,657 |  | 2.0 |  |  |  | 1,732 |  | 1.2 |  |  |  | 1,473 |  | (0.6) |
Domestic Production Activities Deduction |  |  | (5,170) |  | (2.8) |  |  |  | (3,641) |  | (2.6) |  |  |  | (2,246) |  | (2.4) |
Goodwill Impairment |  |  | — |  | — |  |  |  | — |  | — |  |  |  | 89,191 |  | (33.3) |
Impact of state tax rate changes on deferreds |  |  | 3,245 |  | 1.7 |  |  |  | — |  | — |  |  |  | — |  | — |
Other |  |  | 1,800 |  | 1.0 |  |  |  | (873) |  | (0.6) |  |  |  | (329) |  | 3.4 |
(Benefit) provision for income taxes |  | $ | 79,502 |  | 42.4 | % |  | $ | 52,319 |  | 37.5 | % |  | $ | (2,442) |  | 0.9 | %
The Company’s provision for income taxes and effective tax rate for the year ended December 31, 201 4 were significantly impacted by a shift in revenue from projects in higher-tax jurisdictions causing a rise in the state tax rate. The higher state tax rate was applied to deferred tax balances which further increased the effective rate. The Company’s provision for income taxes and effective tax rate for the year ended December 31, 2012 were significantly impacted by the goodwill and intangible asset impairment charge discussed in Note 3 — Goodwill and Other Intangible Assets. Of the total goodwill and intangible asset impairment charge of $376.6 million, approximately $255.0 million pertained to goodwill that had no corresponding tax basis. The tax effect of the impairment charge resulted in a reduction in the Company’s provision for income taxes of approximately $50.2 million in 2012. The following is a summary of the significant components of the deferred tax assets and liabilities:
|  | Year ended December 31,
|  | 2014 |  | 2013
|  | (in thousands)
Deferred Tax Assets |  |  |  |  |  |
Timing of expense recognition |  | $ | 47,017 |  | $ | 24,170
Net operating losses |  |  | 2,188 |  |  | 4,123
Other, net |  |  | 6,980 |  |  | 5,641
Deferred tax assets |  |  | 56,185 |  |  | 33,934
Valuation Allowance |  |  | (1,369) |  |  | (2,817)
Net deferred tax assets |  |  | 54,816 |  |  | 31,117
Deferred Tax Liabilities |  |  |  |  |  |
Intangible assets, due primarily to purchase accounting |  |  | (26,094) |  |  | (18,260)
Fixed assets, due primarily to purchase accounting |  |  | (90,886) |  |  | (79,243)
Construction contract accounting |  |  | (6,854) |  |  | (6,432)
Joint ventures - construction |  |  | (30,654) |  |  | (5,229)
Contested Legal Settlement |  |  | — |  |  | (12,012)
Other |  |  | (10,012) |  |  | (3,408)
Deferred tax liabilities |  |  | (164,500) |  |  | (124,584)
Net deferred tax liability |  | $ | (109,684) |  | $ | (93,467)
T h e n et d e f e rr ed tax lia b ili t y i s cla ss i f ied i n t h e C o ns o li d at e d B ala n ce S h eets b a s ed o n w h en t h e f u t u r e b e n e f it (e x p e ns e) is e x p ected to b e r e alized as f o ll o w s:
|  | December 31,
|  | 2014 |  | 2013
|  | (in thousands)
Current deferred tax asset |  | $ | 17,962 |  | $ | 8,240
Long-term deferred tax asset |  |  | 36,854 |  |  | 22,877
Current deferred tax liability |  |  | (14,129) |  |  | (10,251)
Long-term deferred tax liability |  |  | (150,371) |  |  | (114,333)
Net deferred tax liability |  | $ | (109,684) |  | $ | (93,467)
At December 31, 2013 the Company had a valuation allowance of $2.8 million and at December 31, 2014, the Company had a valuation allowance of $1.4 million for federal and state capital loss-carry-forwards as the ultimate utilization of this item was less than “more likely than not.” In general, it is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. As of the years ended December 31, 2014 and December 31, 2013, unremitted earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated approximately $15.1 million and $4.3 million, respectively. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. The Company adopted the provisions of FASB ASC 740-10, Income Taxes, Accounting for Uncertainty in Income Taxes, in the first quarter of 2007. It is the Company’s policy to record any accrued interest and penalties as part of the income tax provision. During 2013, the Company recognized a net increase of $1.4 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2013 is $5.5 million. Included in this liability is $0.5 million of related interest. During 2014, the Company recognized a net increase of $2.2 million in liabilities. The amount of gross unrecognized tax benefits as of December 31, 2014 is $7.6 million. Included in this liability is $0.8 million of related interest. The Company does not expect any significant release of unrecognized tax benefits within the next twelve months. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefit is as follows (in thousands):
Gross unrecognized tax benefit balance at January 1, 2012 |  | $ | 2,043
Add: |  |  |
Additions based on tax positions related to current year |  |  | 1,281
Additions/reductions for tax positions of prior years |  |  | 1,857
Less: |  |  |
Reductions for tax positions of prior years (expiration of statute of limitations) |  |  | (1,158)
Gross unrecognized tax benefit balance at December 31, 2012 |  | $ | 4,023
Gross unrecognized tax benefit balance at January 1, 2013 |  | $ | 4,023
Add: |  |  |
Additions based on tax positions related to current year |  |  | 1,254
Additions/reductions for tax positions of prior years |  |  | 182
Less: |  |  |
Reductions for tax positions of prior years (expiration of statute of limitations) |  |  | —
Gross unrecognized tax benefit balance at December 31, 2013 |  | $ | 5,459
Gross unrecognized tax benefit balance at January 1, 2014 |  | $ | 5,459
Add: |  |  |
Additions based on tax positions related to current year |  |  | 2,929
Additions/reductions for tax positions of prior years |  |  | 426
Less: |  |  |
Reductions for tax positions of prior years (expiration of statute of limitations) |  |  | (1,178)
Gross unrecognized tax benefit balance at December 31, 2014 |  | $ | 7,636
The company records interest and penalties related to an unrecognized tax benefit in income tax expenses. Interest expense of $0.4 million was recorded during 2014.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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