XML 37 R21.htm IDEA: XBRL DOCUMENT v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

15. Income Taxes

The (benefit from) provision for income taxes is as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

(in thousands)

 

 

 

 

 

 

 

 

 

Current tax expense (benefit)

 

 

 

 

 

 

 

 

 

Federal

 

$

23,351

 

 

$

22,085

 

 

$

(9,106

)

State

 

 

8,148

 

 

 

7,667

 

 

 

4,710

 

Foreign

 

 

13,918

 

 

 

13,877

 

 

 

13,422

 

Total current tax expense

 

 

45,417

 

 

 

43,629

 

 

 

9,026

 

Deferred tax (benefit) expense

 

 

 

 

 

 

 

 

 

Federal

 

 

(129,055

)

 

 

(16,007

)

 

 

(6,501

)

State

 

 

(59,512

)

 

 

5,827

 

 

 

868

 

Foreign

 

 

(2,187

)

 

 

168

 

 

 

(8,724

)

Total deferred tax benefit

 

 

(190,754

)

 

 

(10,012

)

 

 

(14,357

)

Total (benefit from) provision for income taxes

 

$

(145,337

)

 

$

33,617

 

 

$

(5,331

)

 

A reconciliation of the Company's effective income tax rate as compared to the federal statutory income tax rate is as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Statutory U.S. rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

State tax, net of federal tax benefit

 

 

2.7

%

 

 

11.7

%

 

 

(2.4

)%

Foreign tax, net of federal tax benefit

 

 

(0.2

)%

 

 

5.3

%

 

 

1.1

%

Goodwill impairment

 

 

(14.0

)%

 

 

—

 

 

 

—

 

Disallowed executive compensation

 

 

(0.1

)%

 

 

2.3

%

 

 

(3.2

)%

Equity-based compensation

 

 

—

 

 

 

(2.4

)%

 

 

(10.4

)%

Meals and entertainment

 

 

(0.1

)%

 

 

1.6

%

 

 

(0.7

)%

Contingent consideration fair value adjustment

 

 

—

 

 

 

(1.8

)%

 

 

(1.3

)%

Fair value of warrant liability

 

 

0.3

%

 

 

0.2

%

 

 

(1.6

)%

Work opportunity tax credit

 

 

0.2

%

 

 

(2.5

)%

 

 

0.4

%

Other

 

 

(0.2

)%

 

 

1.5

%

 

 

0.1

%

Effective tax rate

 

 

9.6

%

 

 

36.9

%

 

 

3.0

%

 

 

The geographic components of income (loss) before income taxes are as follows:

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

(in thousands)

 

 

 

 

 

 

 

 

 

U.S. sources

 

$

(1,544,387

)

 

$

65,202

 

 

$

(203,526

)

Non-U.S. sources

 

 

21,758

 

 

 

25,964

 

 

 

23,125

 

(Loss) income before income taxes

 

$

(1,522,629

)

 

$

91,166

 

 

$

(180,401

)

 

 

Net deferred tax liabilities consist of the following:

 

 

 

December 31,

 

(in thousands)

 

2022

 

 

2021

 

Deferred tax assets

 

 

 

 

 

 

Accrued liabilities

 

$

68,016

 

 

$

78,711

 

Interest expense

 

 

53,320

 

 

 

37,335

 

Right-of-use liabilities

 

 

14,356

 

 

 

9,790

 

Net operating losses

 

 

7,904

 

 

 

10,193

 

Transaction expenses

 

 

7,649

 

 

 

8,192

 

Contingent liabilities

 

 

3,903

 

 

 

7,768

 

Insurance reserves

 

 

2,522

 

 

 

2,138

 

Acquired intangible assets, including goodwill

 

 

1,487

 

 

 

1,182

 

Social security tax deferral

 

 

—

 

 

 

6,382

 

Other

 

 

8,293

 

 

 

4,534

 

Total deferred tax assets

 

 

167,450

 

 

 

166,225

 

Deferred tax liabilities

 

 

 

 

 

 

Acquired intangible assets, including goodwill

 

 

413,728

 

 

 

608,316

 

Interest rate caps

 

 

12,079

 

 

 

2,419

 

Right-of-use assets

 

 

10,044

 

 

 

6,218

 

Debt issuance costs

 

 

7,532

 

 

 

9,629

 

Restructuring expenses

 

 

3,427

 

 

 

4,788

 

Depreciation

 

 

2,397

 

 

 

2,968

 

Other

 

 

8,545

 

 

 

7,397

 

Total deferred tax liabilities

 

 

457,752

 

 

 

641,735

 

Less: deferred income tax asset valuation allowances

 

 

(5,360

)

 

 

(6,853

)

Net deferred tax liabilities

 

$

295,662

 

 

$

482,363

 

 

 

 

 

 

 

 

 

 

December 31,

 

(in thousands)

 

2022

 

 

2021

 

Reported as:

 

 

 

 

 

 

Noncurrent deferred tax asset

 

$

2,211

 

 

$

802

 

Noncurrent deferred tax liabilities

 

 

297,873

 

 

 

483,165

 

Net deferred tax liabilities

 

$

295,662

 

 

$

482,363

 

 

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) that was signed into law on March 27, 2020 allows employers to defer payment of a portion of payroll taxes otherwise due on wages paid between the enactment date and December 31, 2020 and remit the deferred payroll taxes in equal amounts on December 31, 2022 and 2021. Under this provision of the CARES Act, the Company has recorded the tax impact of $6.4 million as a deferred tax asset as of December 31, 2021 and no remaining balance as of December 31, 2022.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (“IRA”), which, among other things, imposes a new corporate alternative minimum tax and an excise tax on stock buybacks. The Company did not have any stock buybacks during the year ended December 31, 2022.

The Company held cash and cash equivalents in foreign subsidiaries of $81.8 million and $86.2 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the undistributed earnings of the Company’s foreign subsidiaries are $196.4 million and $164.1 million, respectively.

The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2022, except for a $2.8 million of deferred tax liability recorded as of December 31, 2022 for unremitted earnings in Canada with respect to which the Company no longer has an indefinite reinvestment assertion. Taxes have not been provided on the remaining $125.1 million of undistributed foreign earnings. The incremental tax liability associated with these earnings is expected to be immaterial.

The Company evaluates its deferred tax assets, including a determination of whether a valuation allowance is necessary, based upon its ability to utilize the assets using a more likely than not analysis. Deferred tax assets are only recorded to the extent that they are realizable based upon past and future income. As a result of the evaluation, the Company established a valuation allowance of $5.4

million, $6.9 million and $6.7 million on its foreign affiliates’ deferred tax assets as of December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, the Company had $4.9 million of United States Federal Net Operating Losses (“NOL”), $22.6 million state NOLs, and $19.6 million foreign NOLs. The change of ownership provisions of the Tax Reform Act of 1986 may limit utilization of a portion of The Company’s domestic NOLs to future periods. The United States Federal NOLs expire in 2037, $16.0 million of the state NOLs expire between 2023 and 2041 and the remaining $6.6 million of the state NOLs carry forward indefinitely. Foreign NOLs of $7.7 million expire between 2024 and 2032 and the remaining $11.9 million of the foreign NOLs carry forward indefinitely.