Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Current:
Federal	$	5,449	$	—	$	—
State and local	1,309		327		568
Foreign	1,350		1,695		1,183
Total current expense (benefit)	8,108		2,022		1,751
Deferred:
Federal	(115,905)		(141,251)		(47,468)
State and local	(3,334)		(7,360)		(2,034)
Total deferred expense (benefit)	(119,239)		(148,611)		(49,502)
Total income tax expense (benefit)	$	(111,131)	$	(146,589)	$	(47,751)

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

	Year Ended December 31,
	2023		2022		2021
Expected provision at federal statutory tax rate	21.0	%	21.0	%	21.0	%
State tax expense, net of federal benefit	1.5	%	1.6	%	0.8	%
Permanent tax differences	(1.3)	%	(0.6)	%	(0.4)	%
Premium on convertible debt repurchase	—	%	—	%	(11.4)	%
Valuation allowance	(1.2)	%	(0.8)	%	(0.5)	%
Other	(0.1)	%	(0.3)	%	(0.3)	%
Total income tax expense (benefit)	19.9	%	20.9	%	9.2	%

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, 2023 and 2022, the significant components of the Company's deferred taxes consisted of the following:

	December 31,
	2023		2022
	(in thousands)
Deferred tax assets:
Income tax credits	$	4,298	$	4,306
Net operating losses	328,977		340,023
Deferred revenue	25,924		20,751
Nondeductible accruals	32,899		25,738
Deferred manufacturing credits	14,556		14,054
Loan liability	115,161		11,404
Operating lease liability	797,778		598,097
Interest expense	51,305		38,327
Other	38,910		27,190
Valuation allowance	(17,654)		(10,852)
Deferred tax assets	1,392,154		$	1,069,038
Deferred tax liabilities:
Property, plant and equipment	612,571		634,018
Accrued aircraft and engine maintenance	70,997		38,755
Right-of-use asset	803,232		608,176
Other	13,115		14,932
Deferred tax liabilities	1,499,915		1,295,881
Net deferred tax assets (liabilities)	$	(107,761)	$	(226,843)

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, 2023 and 2022, the Company had a valuation allowance of $17.7 million and $10.9 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, 2023, the Company had $2.8 million of foreign tax credits, $1.4 million of general business tax credits, $1.4 billion of federal net operating loss and $643.5 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, 2023, 2022 and 2021, the Company did not recognize any liabilities for uncertain tax positions nor any interest and penalties on unrecognized tax benefits.

For tax years 2023, 2022 and 2021, 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 2020 through 2022 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.