SkyWest Airlines 2002 Annual Report Download - page 46

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As of December 31, 2002, the Company had available $10,000,000 in an unsecured bank line of
credit through December 15, 2004, with interest payable at the bank’s base rate less one-quarter
percent, which was a net rate of 4.0%. The line of credit provides for a total of $10,000,000 available
for borrowings or letters of credit with the same institution. The Company had $6,044,834 of letters of
credit and no borrowings outstanding under this line of credit as of December 31, 2002. Additionally,
the Company had $1,275,216 of letters of credit outstanding with another bank at December 31, 2002.
Certain of the Company’s long-term debt arrangements contain limitations on, among other things,
the sale or lease of assets and ratio of long-term debt to tangible net worth. As of December 31, 2002,
the Company was in compliance with all debt covenants contained in its long-term debt agreements.
(3) Income Taxes
The provision for income taxes includes the following components (in thousands):
Year ended December 31,
2002 2001 2000
Current tax provision:
Federal ................................. $29,029 $20,226 $29,201
State ................................... 7,155 5,123 6,092
36,184 25,349 35,293
Deferred tax provision:
Federal ................................. 17,651 4,088 3,024
State ................................... 1,707 2,860 395
19,358 6,948 3,419
Provision for income taxes ..................... $55,542 $32,297 $38,712
The following is a reconciliation between the statutory Federal income tax rate of 35% and the
effective rate which is derived by dividing the provision for income taxes by income before provision for
income taxes (in thousands):
Year ended December 31,
2002 2000 2001
Computed ‘‘expected’’ provision for income taxes at
the statutory rates ......................... $49,845 $28,985 $34,855
Increase in income taxes resulting from:
State income taxes, net of Federal income tax
benefit ................................ 6,133 3,729 4,263
Other, net ............................... (436) (417) (406)
Provision for income taxes ..................... $55,542 $32,297 $38,712
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