Income Tax

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The provision for income taxes consists of the following:

	Year Ended December 31,
	2021		2020		2019
	(in thousands)
Current:
Federal	$	—	$	(38,520)	$	38,520
State	184		(107)		1,025
Foreign	6,754		2,574		2,937
Deferred:
Federal	94,050		163,002		91,243
State	3,396		3,465		14,839
Foreign	—		—		—
Income tax expense	$	104,384	$	130,414	$	148,564

    

Differences between the provision for income taxes and income taxes at the statutory federal income tax rate are as follows:

	Year Ended December 31,
	2021				2020				2019
	Amount		Percent		Amount		Percent		Amount		Percent
	(in thousands, except percentages)
Income taxes at statutory federal rate	$	113,613	21.0	%	$	135,802	21.0	%	$	154,494	21.0	%
Foreign tax credit	(15,651)		(2.9)		(9,464)		(1.5)		(18,231)		(2.5)
State income taxes, net of federal income tax effect and other	2,828		0.5		2,653		0.4		12,532		1.7
Other	3,594		0.7		1,423		0.2		(231)		—
Income tax expense	$	104,384	19.3	%	$	130,414	20.1	%	$	148,564	20.2	%

As of December 31, 2021 and 2020, the Company’s net deferred tax assets (liabilities) are as follows:

	December 31, 2021		December 31, 2020
	(in thousands)
Deferred tax assets
Net operating losses	$	127,591	$	24,206
Foreign tax credit	78,286		60,160
Rents received in advance	26,702		28,007
Other	19,743		5,383
Equity compensation	4,462		3,386
Accrued bonus	4,349		1,126
Total deferred tax assets	261,133		122,268
Deferred tax liabilities
Aircraft depreciation	$	(1,219,061)	$	(995,023)
Straight-line rents	(55,342)		(43,649)
Total deferred tax liabilities	$	(1,274,403)	$	(1,038,672)
Net deferred tax assets/(liabilities)	$	(1,013,270)	$	(916,404)

The Company has NOL for federal and state income tax purposes of $600.5 million and $24.0 million as of December 31, 2021, respectively, which are available to offset future taxable income in future periods. The Company has foreign tax credits for federal income tax purposes of $78.3 million as of December 31, 2021 which are available to offset future taxable income in future periods. The Company's loss and tax credit carryforwards expire in the following periods:

	NOL Carryforwards		Tax Credit Carryforwards
	(in thousands)
2022-2026	$	—	$	11,935
Thereafter	624,538		66,404
Total carryforwards	$	624,538	$	78,339

The Company has not recorded a valuation allowance against its deferred tax assets as of December 31, 2021 and 2020 as realization of the deferred tax asset is considered more likely than not. In assessing the realizability of the deferred tax assets, management considered whether forecasted income, together with reversals of existing deferred tax liabilities, and tax planning strategies will be sufficient to recover the deferred tax assets and tax credits in making this assessment. Management anticipates the timing differences on aircraft depreciation will reverse and be available for offsetting the reversal of deferred tax assets. As of December 31, 2021 and 2020, the Company has not recorded any liability for unrecognized tax benefits.

The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The Company is subject to examinations by the major tax jurisdictions for the 2017 tax year and forward.