Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesSignificant components of the provision for income taxes from continuing operations are as follows:

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Current:
Federal	$	—	$	—	$	(141,997)
State and local	327		568		(1,847)
Foreign	1,695		1,183		(1,554)
Total current expense (benefit)	2,022		1,751		(145,398)
Deferred:
Federal	(141,251)		(47,468)		(33,494)
State and local	(7,360)		(2,034)		(12,592)
Total deferred expense (benefit)	(148,611)		(49,502)		(46,086)
Total income tax expense (benefit)	$	(146,589)	$	(47,751)	$	(191,484)

The income tax provision differs from that computed at the federal statutory corporate tax rate as follows:

	Year Ended December 31,
	2022		2021		2020
Expected provision at federal statutory tax rate	21.0	%	21.0	%	21.0	%
State tax expense, net of federal benefit	0.8	%	0.2	%	1.9	%
Revaluation of deferred taxes	—	%	—	%	9.2	%
Premium on convertible debt repurchase	—	%	(11.4)	%	—	%
Other	(0.9)	%	(0.6)	%	(1.2)	%
Total income tax expense (benefit)	20.9	%	9.2	%	30.9	%

The Company accounts for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the consolidated financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. At December 31, 2022 and 2021, the significant components of the Company's deferred taxes consisted of the following:

	December 31,
	2022		2021
	(in thousands)
Deferred tax assets:
Income tax credits	$	4,306	$	4,298
Net operating losses	340,023		263,350
Deferred revenue	20,751		23,119
Nondeductible accruals	25,738		21,858
Deferred manufacturing credits	14,054		8,458
Loan liability	11,404		11,643
Operating lease liability	598,097		432,492
Interest expense	38,327		18,544
Other	27,190		4,687
Valuation allowance	(10,852)		(5,099)
Deferred tax assets	1,069,038		$	783,350
Deferred tax liabilities:
Property, plant and equipment	634,018		644,407
Accrued aircraft and engine maintenance	38,755		74,742
Right-of-use asset	608,176		438,804
Other	14,932		869
Deferred tax liabilities	1,295,881		1,158,822
Net deferred tax assets (liabilities)	$	(226,843)	$	(375,472)

In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be realized. In evaluating the Company’s ability to utilize its deferred tax assets, it considered all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. As of December 31, 2022 and 2021, the Company had a valuation allowance of $10.9 million and $5.1 million, respectively, against certain deferred tax assets related to equity compensation for executives due to changes in tax law resulting from the Tax Cuts and Jobs Act ("TCJA"), state net operating loss carryforwards and foreign tax credits.

As of December 31, 2022, the Company had $2.8 million of foreign tax credits, $1.4 million of general business tax credits, $1.5 billion of federal net operating loss and $593.9 million of state net operating loss available, that may be applied against future tax liabilities. The foreign tax credits will begin to expire in 2025, the state net operating losses will begin to expire in 2027, the general business credits will begin to expire in 2038 and there is no expiration of federal net operating losses.

For tax years ended December 31, 2022, 2021 and 2020, the Company did not recognize any liabilities for uncertain tax positions nor any interest and penalties on unrecognized tax benefits.

For tax years 2022, 2021 and 2020, all income for the Company is subject to domestic income taxes.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company's federal income tax returns for 2019 through 2021 tax years are still subject to examination in the United States Various state and foreign jurisdiction tax years also remain open to examination. The Company believes that any potential assessment would be immaterial to its consolidated financial statements.