Income Tax

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The provision for income taxes consists of the following:

	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Current:
Federal	$	37,405	$	—	$	—
State	3,209		2,195		113
Foreign	1,918		3,463		1,750
Deferred:
Federal	16,548		309,614		(43,414)
State	36		343		(190)
Foreign	46,437		(176,603)		—
Income tax expense/(benefit)	$	105,553	$	139,012	$	(41,741)

    

Income/(loss) before taxes consisted of the following:

	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Domestic	$	415,001	$	658,023	$	(189,849)
Foreign	118,256		95,611		51,084
Income/(loss) before taxes	$	533,257	$	753,634	$	(138,765)

    

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

	Year Ended December 31,
	2024				2023				2022
	Amount		Percent		Amount		Percent		Amount		Percent
	(in thousands, except percentages)
Income taxes at statutory federal rate	$	111,984	21.0	%	$	158,264	21.0	%	$	(29,141)	21.0	%
Effect of rates different than statutory	(12,287)		(2.3)		(18,917)		(2.5)		(10,728)		7.7
Foreign tax credit	(9,668)		(1.8)		(10,252)		(1.4)		(8,274)		6.0
Section 162(m) limitation	5,083		0.9		4,349		0.6		3,913		(2.8)
Foreign income taxes	1,912		0.4		3,371		0.5		1,750		(1.3)
State income taxes, net of federal income tax effect and other	2,564		0.5		2,005		0.2		(61)		0.1
Other	5,965		1.1		192		0.1		800		(0.6)
Income tax expense/(benefit)	$	105,553	19.8	%	$	139,012	18.5	%	$	(41,741)	30.1	%

As of December 31, 2024 and 2023, the Company’s net deferred tax assets (liabilities) are as follows:

	December 31, 2024		December 31, 2023
	(in thousands)
Deferred tax assets
Net operating losses	$	561,287	$	491,684
Interest expense limitation	319,546		209,493
Foreign tax credit	—		64,945
Rents received in advance	22,492		27,642
Other	23,979		24,456
Total deferred tax assets	927,304		818,220
Deferred tax liabilities
Aircraft depreciation	$	(1,919,687)	$	(1,696,839)
Effects of foreign jurisdiction deferred taxes	(148,114)		(177,879)
Straight-line rents	(31,785)		(47,460)
Total deferred tax liabilities	$	(2,099,586)	$	(1,922,178)
Net deferred tax assets/(liabilities)	$	(1,172,282)	$	(1,103,958)

The Company had deferred tax assets related to interest expense that was limited for federal income tax purposes of $319.5 million as of December 31, 2024, which are available indefinitely to offset taxable income in future periods. The Company also has utilized all deferred tax assets related to foreign tax credits for federal income tax purposes as of December 31, 2024.

As of December 31, 2024, the Company has a net operating loss (“NOL”) for foreign income tax and for state income tax purposes of $560.0 million (tax-effected) and $1.6 million (tax-effected, excluding the federal benefit), respectively, which are available to offset taxable income in future periods. The Company’s NOL carryforward expire in the following periods:

	NOL Carryforwards (tax effected)
	(in thousands)
2024-2028	$	—
Thereafter	561,287
Total carryforwards	$	561,287

As of December 31, 2024, the Company has deferred tax assets of $148.1 million included in Other assets in the Company’s consolidated balance sheet. The Company has not recorded a valuation allowance against its deferred tax assets as of December 31, 2024 and 2023 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, 2024 and 2023, 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 major tax jurisdictions for the 2020 tax year and forward. The Internal Revenue Service completed its audit of tax years 2019 to 2020 with no adjustments.