Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes

Schedule of components of provision (benefit) for income taxes

The provision for income taxes includes the following components (in thousands):

	Year ended December 31,
	2021		2020		2019
Current tax provision (benefit):
Federal	$	—	$	(4,397)	$	(4,395)
State		846		(875)		891
		846		(5,272)		(3,504)
Deferred tax provision (benefit):
Federal		32,510		6,659		95,655
State		5,344		(199)		14,055
		37,854		6,460		109,710
Provision for income taxes	$	38,700	$	1,188	$	106,206

Schedule of income tax rate reconciliation

The following is a reconciliation between a federal income tax rate of 21% and the effective tax rate which is derived by dividing the provision for income taxes by the income (loss) before the provision for income taxes (in thousands):

	Year ended December 31,
	2021		2020		2019
Computed provision (benefit) for income taxes at the statutory rate	$	31,628	$	(1,539)	$	93,724
Increase (decrease) in income taxes resulting from:
State income tax provision, net of federal income tax benefit		6,247		173		15,645
Non-deductible expenses		1,007		2,539		3,934
Valuation allowance changes affecting the provision for income taxes		—		(892)		(517)
Excess tax benefits from share-based compensation		(92)		(1,434)		(3,525)
Other, net		(90)		2,341		(3,055)
Provision for income taxes	$	38,700	$	1,188	$	106,206

Schedule of components of the net deferred tax assets and liabilities

The significant components of the Company’s net deferred tax assets and liabilities as of December 31, 2021 and 2020, are as follows (in thousands):

	As of December 31,
	2021		2020
Deferred tax assets:
Accrued benefits	$	21,401	$	19,668
Net operating loss carryforward		175,659		229,815
Aircraft credits		22,265		10,767
Deferred revenue		25,405		27,076
Operating lease liabilities		57,991		70,541
Accrued reserves and other		31,431		34,816
Total deferred tax assets		334,152		392,683
Valuation allowance		—		—
Deferred tax liabilities:
Accelerated depreciation		(940,867)		(950,071)
Operating lease right-of-use assets		(56,521)		(68,543)
Total deferred tax liabilities		(997,388)		(1,018,614)
Net deferred tax liability	$	(663,236)	$	(625,931)

Schedule of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the year ended December 31, 2021, 2020, and 2019 is as follows (in thousands):

	Year ended December 31,
	2021		2020		2019
Unrecognized tax benefits at the beginning of year	$	14,980	$	14,620	$	14,553
Gross increases - current year tax positions		—		—		—
Gross increases - prior year tax positions		549		360		67
Gross decreases - prior year tax positions		—		—		—
Unrecognized tax benefits at end of year	$	15,529	$	14,980	$	14,620
Interest and penalties in year-end balance	$	976	$	427	$	67