Income Tax

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Tax

Income Tax

The provision for income taxes consists of the following:

	Year Ended December 31, 2025		Year Ended December 31, 2024		Year Ended December 31, 2023
	(in thousands)
Current:
Federal	$	113,626	$	37,405	$	—
State	4,145		3,209		2,195
Foreign	12,537		1,918		3,463
Deferred:
Federal	91,400		16,548		309,614
State	3,155		36		343
Foreign	56,443		46,437		(176,603)
Income tax expense	$	281,306	$	105,553	$	139,012

    

Income before taxes consisted of the following:

	Year Ended December 31, 2025		Year Ended December 31, 2024		Year Ended December 31, 2023
	(in thousands)
Domestic	$	1,151,087	$	415,001	$	658,023
Foreign	218,606		118,256		95,611
Income before taxes	$	1,369,693	$	533,257	$	753,634

    

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 1, Basis of Preparation and Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to our provision for income taxes for the year ended December 31, 2025 was as follows:

	Year Ended December 31, 2025
	Amount of Income Tax Expense		% of Total
	(in thousands, except percentages)
Income taxes at statutory federal rate	$	287,625	21.0	%
State and local income taxes, net of federal income tax effect(a)	5,767		0.4
Foreign tax effects
Ireland
Statutory rate differences between Ireland and United States	(16,159)		(1.2)
Other	233		0.1
Hong Kong
Statutory rate differences between Hong Kong and United States	(3,554)		(0.3)
Other	1,882		0.1
Other foreign jurisdictions	1,117		0.1
Tax Credits
Foreign tax credit	(3,617)		(0.3)
Non-taxable or non-deductible items
Section 162(m) limitation	10,737		0.8
Other	(2,725)		(0.2)
Income tax expense	$	281,306	20.5	%
(a) State taxes in California, New York State, and New York City, made up the majority (greater than 50 percent) of the tax-effect in this category.

The reconciliation of taxes at the federal statutory rate to our provision for income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:

	Year Ended December 31, 2024				Year Ended December 31, 2023
	Amount of Income Tax Expense		% of Total		Amount of Income Tax Expense		% of Total
	(in thousands, except percentages)
Income taxes at statutory federal rate	$	111,984	21.0	%	$	158,264	21.0	%
Effect of rates different than statutory	(12,287)		(2.3)		(18,917)		(2.5)
Foreign tax credit	(9,668)		(1.8)		(10,252)		(1.4)
Section 162(m) limitation	5,083		0.9		4,349		0.6
Foreign income taxes	1,912		0.4		3,371		0.5
State income taxes, net of federal income tax effect and other	2,564		0.5		2,005		0.2
Other	5,965		1.1		192		0.1
Income tax expense	$	105,553	19.8	%	$	139,012	18.5	%

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 1, Basis of Preparation and Summary of Significant Accounting Policies, cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows:

	December 31, 2025
	(in thousands)
Domestic
Federal	$	48,315
State	5,131
Foreign
Hong Kong	$	4,680
Other countries	1,204
Total cash paid for income taxes, net of refunds	$	59,330

As of December 31, 2025 and 2024, the Company’s net deferred tax assets (liabilities) are as follows:

	December 31, 2025		December 31, 2024
	(in thousands)
Deferred tax assets
Net operating losses	$	621,393	$	561,287
Interest expense limitation	291,865		319,546
Rents received in advance	21,104		22,492
Other	31,254		23,979
Total deferred tax assets	965,616		927,304
Deferred tax liabilities
Aircraft depreciation	$	(2,152,757)	$	(1,919,687)
Effects of foreign jurisdiction deferred taxes	(108,560)		(148,114)
Straight-line rents	(20,969)		(31,785)
Total deferred tax liabilities	$	(2,282,286)	$	(2,099,586)
Net deferred tax assets/(liabilities)	$	(1,316,670)	$	(1,172,282)

The Company had deferred tax assets related to interest expense that was limited for federal income tax purposes of $291.9 million as of December 31, 2025, 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, 2025.

As of December 31, 2025, the Company has a net operating loss (“NOL”) for foreign income tax and for state income tax purposes of $620.2 million (tax-effected) and $1.4 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)
2026-2030	$	—
Thereafter	621,393
Total carryforwards	$	621,393

As of December 31, 2025, the Company has deferred tax assets of $108.6 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, 2025 and 2024 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, 2025 and 2024, 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 2021 tax year and forward. The Internal Revenue Service has informed the Company of its intent to audit tax year 2023.