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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Domestic and Foreign Income Taxes | The following table sets forth components of income before income taxes:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Domestic | $ | 30,211 |  |  | $ | 98,004 |  |  | $ | 74,256 |
Foreign | 8,058 |  |  | 7,715 |  |  | 3,888 |
Income before income taxes | $ | 38,269 |  |  | $ | 105,719 |  |  | $ | 78,144 |
Income Tax Provision (Benefit) | The components of the provision (benefit) for income taxes were as follows:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Current income tax provision (benefit): |  |  |  |  |
Federal | $ | 34 |  |  | $ | (722) |  |  | $ | (779) |
State | 372 |  |  | 733 |  |  | 1,779 |
Foreign | 1,255 |  |  | 1,202 |  |  | 844 |
Total current | 1,661 |  |  | 1,213 |  |  | 1,844 |
Deferred income tax (benefit) provision: |  |  |  |  |
Federal | (22,677) |  |  | 2,528 |  |  | (8,025) |
State | (5,657) |  |  | 2,300 |  |  | 3,561 |
Foreign | 1,038 |  |  | 1,129 |  |  | 573 |
Total deferred | (27,296) |  |  | 5,957 |  |  | (3,891) |
Total income tax (benefit) provision | $ | (25,635) |  |  | $ | 7,170 |  |  | $ | (2,047) |
Deferred Income Tax Assets and Liabilities | Deferred tax assets and liabilities consisted of the following:
| December 31, |  |
| 2023 |  | 2022 |  |
Deferred income tax assets: |  |  |  |  |
Compensation accruals | $ | 4,137 |  |  | $ | 3,306 |  |  |
Reserves | 5,906 |  |  | 4,111 |  |  |
Sale-leasebacks and other accruals | 49,300 |  |  | 32,945 |  |  |
Net operating losses | 28,565 |  |  | 18,395 |  |  |
Interest limitation | 8,273 |  |  | — |  |  |
Energy efficiency | 82,827 |  |  | 71,433 |  |  |
Deferred revenue | 2,114 |  |  | 2,132 |  |  |
Gross deferred income tax assets | 181,122 |  |  | 132,322 |  |  |
Valuation allowance | (3,704) |  |  | (3,621) |  |  |
Total deferred income tax assets | $ | 177,418 |  |  | $ | 128,701 |  |  |
Deferred income tax liabilities: |  |  |  |  |
Depreciation | $ | (137,966) |  |  | $ | (122,762) |  |  |
Deferred effect of derivative liability | (2,166) |  |  | (1,640) |  |  |
Canadian capital cost, allowance and amortization | (5,738) |  |  | (3,098) |  |  |
Italy intangibles | (1,324) |  |  | — |  |  |
United Kingdom goodwill amortization | (852) |  |  | (952) |  |  |
Outside basis difference | (6,599) |  |  | (5,038) |  |  |
Interest rate swaps | (841) |  |  | (1,347) |  |  |
Total deferred income tax liabilities | (155,486) |  |  | (134,837) |  |  |
Deferred income tax assets (liabilities), net | $ | 21,932 |  |  | $ | (6,136) |  |  |
Summary of Valuation Allowance | Our valuation allowance related to the following items:
| December 31,
| 2023 |  | 2022
Interest rate swaps (1) | $ | — |  |  | $ | 49 |
Foreign net operating loss (2) | 3,702 |  |  | 3,555 |
State net operating loss at one of our subsidiaries (3) | 2 |  |  | 17 |
Total valuation allowance | $ | 3,704 |  |  | $ | 3,621 |
(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, 2023, 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 | $ | 69,130 |  |  | Indefinite
State net operating loss carryforwards | 91,411 |  |  | Various
Canadian net operating loss carryforwards | 32,527 |  |  | 2028 through 2043
Ireland net operating loss carryforwards | 324 |  |  | Indefinite
Spain net operating loss carryforwards | 2,302 |  |  | Indefinite
Total tax loss carryforwards | $ | 195,694 |  |  |
Federal Energy Investment and Production tax credit carryforward | $ | 82,768 |  |  | 2030 through 2043
Summary of Tax Credit Carryforwards | As of December 31, 2023, 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 | $ | 69,130 |  |  | Indefinite
State net operating loss carryforwards | 91,411 |  |  | Various
Canadian net operating loss carryforwards | 32,527 |  |  | 2028 through 2043
Ireland net operating loss carryforwards | 324 |  |  | Indefinite
Spain net operating loss carryforwards | 2,302 |  |  | Indefinite
Total tax loss carryforwards | $ | 195,694 |  |  |
Federal Energy Investment and Production tax credit carryforward | $ | 82,768 |  |  | 2030 through 2043
Reconciliation of Effective Tax Rates | The following is a reconciliation of the effective tax rates:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Income before (benefit) provision for income taxes | $ | 38,269 |  |  | $ | 105,719 |  |  | $ | 78,144 |
Federal statutory tax expense | $ | 8,036 |  |  | $ | 22,201 |  |  | $ | 16,410 |
State income taxes, net of federal benefit | (774) |  |  | 3,844 |  |  | 2,648 |
Net state impact of deferred rate change | (3,213) |  |  | (575) |  |  | (502) |
Nondeductible expenses | 667 |  |  | 2,198 |  |  | 2,572 |
Impact of reserve for uncertain tax positions | (200) |  |  | 59 |  |  | 286 |
Stock-based compensation expense | 4 |  |  | 353 |  |  | (4,618) |
Energy efficiency preferences | (30,359) |  |  | (21,410) |  |  | (17,639) |
Foreign items and rate differential | 458 |  |  | 37 |  |  | 4 |
Adjustment State Taxes | (66) |  |  | — |  |  | — |
Redeemable non-controlling interests | (227) |  |  | (411) |  |  | (2,546) |
Valuation allowance | 81 |  |  | (159) |  |  | 337 |
Miscellaneous | (42) |  |  | 1,033 |  |  | 1,001 |
Total income tax (benefit) provision | $ | (25,635) |  |  | $ | 7,170 |  |  | $ | (2,047) |
Effective tax rate: |  |  |  |  |
Federal statutory rate expense | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | (2.0) | % |  | 3.6 | % |  | 3.4 | %
Net state impact of deferred rate change | (8.4) | % |  | (0.5) | % |  | (0.6) | %
Nondeductible expenses | 1.7 | % |  | 2.1 | % |  | 3.3 | %
Impact of reserve for uncertain tax positions | (0.5) | % |  | 0.1 | % |  | 0.4 | %
Stock-based compensation expense | — | % |  | 0.3 | % |  | (5.9) | %
Energy efficiency preferences | (79.3) | % |  | (20.3) | % |  | (23.2) | %
Foreign items and rate differential | 1.2 | % |  | — | % |  | — | %
Adjustment State Taxes | (0.2) | % |  | — | % |  | — | %
Redeemable non-controlling interests | (0.6) | % |  | (0.4) | % |  | (3.3) | %
Valuation allowance | 0.2 | % |  | (0.2) | % |  | 0.4 | %
Miscellaneous | (0.1) | % |  | 1.1 | % |  | 1.9 | %
Effective tax rate | (67.0) | % |  | 6.8 | % |  | (2.6) | %
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,
| 2023 |  | 2022
Balance, beginning of year | $ | 900 |  |  | $ | 900 |
Additions for current year tax positions | 100 |  |  | — |
Reductions of prior year tax positions | (200) |  |  | — |
Balance, end of year | $ | 800 |  |  | $ | 900 |

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