SkyWest Airlines 2006 Annual Report Download - page 67

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61
(4) Income Taxes
Theprovision for income taxes includes the following components (in thousands):
Year ended December 31,
2006 2005 2004
Currenttaxprovision(benefit):
Federal...............................................$(41,914) $45,714 $13,009
State.................................................(8,419) 5,798 4,643
(50,333) 51,512 17,652
Deferred taxprovision:
Federal...............................................123,646 13,124 33,817
State.................................................20,908 2,723 3,166
144,554 15,847 36,983
Provisionfor income taxes................................$94,221 $67,359 $54,635
Thefollowing is a reconciliation betweenthe 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,
2006 20052004
Computed “expected” provision for income taxes at the
statutoryrates.......................................... $84,009$62,869$47,805
Increase in income taxes resulting from:
Stateincome taxes, net of Federal income tax benefit .......11,867 6,3875,313
Other, net............................................. (1,655) (1,897) 1,516
Provisionfor income taxes................................. $94,221$67,359$54,634
The significant componentsof the netdeferred tax assetsand liabilitiesare as follows (in thousands):
As of December 31,
2006 2005
Deferred taxassets:
Accruedbenefits............................................$16,560 $14,673
Net operatingloss carryforward...............................57,5987,265
AMTcredit carryforward .....................................——
Accruedreserves andother...................................41,57419,074
Totaldeferred tax assets ........................................115,732 41,012
Deferred taxliabilities:
Accelerated depreciation .....................................(355,103) (204,598)
Maintenance andother.......................................(29,879) (20,470)
Totaldeferred taxliabilities .....................................(384,982) (225,068)
Net deferred taxliability. .......................................$(269,250) $(184,056)
TheCompany’s income tax receivable anddeferredtaxliabilities wereprimarily generated through
accelerated bonus depreciation on newly purchased aircraft and support equipment in accordance with the
Job Creation and Worker Assistance Actof 2002.