SkyWest Airlines 2003 Annual Report Download - page 46

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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,
2003 2002 2001
Computed “expected” provision for
income taxes at the statutory rates $ 38,320 $ 49,845 $ 28,985
Increase in income taxes resulting from:
State income taxes,
net of Federal income tax benefit 4,338 6,133 3,729
Other, net 42 (436) (417)
Provision for income taxes $ 42,700 $ 55,542 $ 32,297
The significant components of the net deferred tax assets and liabilities are as follows (in thousands):
As of December 31,
2003 2002
Deferred tax assets:
Accrued benefits $ 2,936 $ 2,555
Accrued reserves and other 4,318 4,257
Total deferred tax assets 7,254 6,812
Deferred tax liabilities:
Accelerated depreciation (153,097) (59,650)
Other (1,809) (3,729)
Total deferred tax liabilities (154,906) (63,379)
Net deferred tax liability $ (147,652) $ (56,567)
(4) Commitments and Contingencies
Lease Obligations
The Company leases 134 aircraft, as well as airport facilities, office space, and various other property and equipment under non-
cancelable operating leases which are generally on a long-term net rent basis where the Company pays taxes, maintenance,
insurance and certain other operating expenses applicable to the leased property. Management expects that, in the normal course
of business, leases that expire will be renewed or replaced by other leases. The following table summarizes future minimum rental
payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of
December 31, 2003 (in thousands):
Year ending December 31,
2004 $ 148,932
2005 146,267
2006 155,568
2007 148,091
2008 146,369
Thereafter 960,299
$ 1,705,526
Total rental expense for non-cancelable aircraft operating leases was approximately $124,936,000, $103,318,000 and
$72,841,000, for the years ended December 31, 2003, 2002 and 2001, respectively.
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