SkyWest Airlines 2011 Annual Report Download - page 87
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SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2011
(6) Income Taxes (Continued)
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 (benefit) for income taxes by income (loss)
before for income taxes (in thousands):
Year ended December 31,
2011 2010 2009
Computed ‘‘expected’’ provision (benefit) for income
taxes at the statutory rates ................... $(14,683) $52,888 $45,884
Increase (decrease) in income taxes resulting from:
Purchase accounting gain ................... 1,999 (5,455) —
State income tax provision (benefit), net of Federal
income tax benefit ....................... (1,810) 3,485 3,741
Other, net .............................. (8,341) (1,367) (1,550)
Provision (benefit) for income taxes ............. (22,835) 49,551 $48,075
For the year ended December 31, 2011, ‘‘Other, net’’ includes $7.2 million of benefit determined in
connection with the preparation of the Company’s 2010 tax return that resulted in an increase in the
ExpressJet deferred tax assets.
The significant components of the net deferred tax assets and liabilities are as follows (in
thousands):
As of December 31,
2011 2010
Deferred tax assets:
Intangible Asset ............................... $ 37,404 $ 37,779
Accrued benefits ............................... 35,460 30,316
Net operating loss carryforward .................... 128,134 70,861
AMT credit carryforward ......................... 15,882 15,882
Deferred aircraft credits ......................... 49,867 42,282
Accrued reserves and other ....................... 24,538 22,707
Total deferred tax assets ........................... 291,285 219,827
Deferred tax liabilities:
Accelerated depreciation ......................... (789,641) (733,572)
Total deferred tax liabilities ......................... (789,641) (733,572)
Net deferred tax liability ........................... $(498,356) $(513,745)
The Company’s deferred tax liabilities were primarily generated through an accelerated bonus
depreciation on newly purchased aircraft and support equipment in accordance with IRS Section 168(k)
in combination with shorter depreciable tax lives.
At December 31, 2011, the Company had federal net operating losses of approximately
$300.2 million and state net operating losses of approximately $858.6 million, which will start to expire
in 2026 and 2016, respectively. As of December 31, 2011, the Company also had an alternative
minimum tax credit of approximately $15.9 million which does not expire.
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