JetBlue Airlines 2003 Annual Report Download - page 69

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JETBLUE AIRWAYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2003
Note 9—Income Taxes (Continued)
The effective tax rate on income before income taxes differed from the federal income tax
statutory rate for the years ended December 31 for the following reasons (in thousands):
2003 2002 2001
Income tax expense at statutory rate .................. $ 61,404 $ 33,258 $ 14,251
Increase (reduction) resulting from:
Decrease in valuation allowance ................... — — (14,659)
State income tax, net of federal benefit .............. 8,935 5,791 3,297
Other, net ................................... 1,202 1,067 489
Total income tax expense .......................... $ 71,541 $ 40,116 $ 3,378
Cash payments for income taxes were $2.2 million, $0.6 million and $55,000 in 2003, 2002 and
2001, respectively.
For financial reporting purposes, a valuation allowance had been recorded at December 31, 2000
and 1999 to reduce the net deferred tax assets to zero. During 2001, we recognized the benefit from
the future use of operating loss carryforwards and other deferred tax assets because our evaluation of
all the available evidence indicated that it was more likely than not that such deferred tax assets would
be realized as the Company was in a net deferred tax liability position.
The net deferred taxes below include a current net deferred tax liability of $1.0 million and a
long-term net deferred tax liability of $99.0 million at December 31, 2003. The components of our
deferred tax assets and liabilities as of December 31 are as follows (in thousands):
2003 2002
Deferred tax assets:
Net operating loss carryforwards .......................... $ 51,610 $ 35,730
Organization and start-up costs ........................... 2,871 4,719
Employee benefits .................................... 2,419 1,402
Gains from sale and leaseback of aircraft .................... 2,683 1,302
Other ............................................. 5,193 1,838
Deferred tax assets .................................. 64,776 44,991
Deferred tax liabilities:
Accelerated depreciation ................................ (160,723) (80,690)
Derivative gains ...................................... (4,046) —
Net deferred tax liability .............................. $ (99,993) $ (35,699)
At December 31, 2003, the Company had regular and alternative minimum tax net operating loss
carryforwards of $130.1 million and $48.8 million, respectively, available for carryforward to reduce the
tax liabilities of future years. These carryforwards begin to expire in 2020 for federal purposes and
between 2013 and 2023 for state purposes.
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