Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes [Abstract]

Income Taxes

‎

(12) Income Taxes:

The following is a reconciliation of the provision for income taxes computed at the federal statutory rate to income taxes computed at the effective rate:

	Successor		Predecessor
	For the three months ended March 31,		For the three months ended March 31,
	2022		2021
Consolidated tax provision at federal statutory rate	21.0	%	21.0	%
State income tax provisions, net of federal income
tax expense	6.7		8.7
Changes in certain deferred tax balances	-		60.9
Interest expense deduction	-		(36.7)
Restructuring cost	-		5.1
Tax reserve adjustment	0.5		-
Tax Credit	(1.1)		-
Sec.162(m) - nondeductible Executive Compensation	4.5		-
All other, net	-		0.2
Effective tax rate	31.6	%	59.2	%

Frontier considered positive and negative evidence in regard to evaluating certain deferred tax assets during the first quarter of 2022, including the development of recent years of pre-tax book losses. On the basis of this evaluation, a valuation allowance of $134 million ($106 million net of federal benefit) was recorded as of March 31, 2022.

As described more fully in Note 1, the Company emerged from bankruptcy on April 30, 2021, and consummated a taxable disposition of substantially all of the assets and/or subsidiary stock of the Company and utilized substantially all of the Company’s Net Operating Losses (“NOLs”).