SkyWest Airlines 2013 Annual Report Download - page 86

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2013
(4) Income Taxes
The provision for income taxes includes the following components (in thousands):
Year ended December 31,
2013 2012 2011
Current tax provision (benefit):
Federal ................................ $ 1,767 $ — $ —
State .................................. 343 441 396
2,110 441 396
Deferred tax provision (benefit):
Federal ................................ 34,728 31,791 (21,533)
State .................................. 2,738 2,507 (1,698)
37,466 34,298 (23,231)
Provision (benefit) for income taxes ............. 39,576 34,739 (22,835)
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 adjusted for permanent differences (in thousands):
Year ended December 31,
2013 2012 2011
Computed ‘‘expected’’ provision (benefit) for income taxes at the
statutory rates adjusted for permanent differences ............... $37,743 $32,983 $(14,683)
Increase (decrease) in income taxes resulting from:
Purchase accounting (gain) adjustment ....................... ——1,999
State income tax provision (benefit), net of Federal income tax
benefit ............................................. 2,867 2,220 (1,810)
Valuation allowance changes affecting the provision for income taxes . 1,430 1,614 —
Other, net ............................................ (2,464) (2,078) (8,341)
Provision (benefit) for income taxes ........................... 39,576 34,739 (22,835)
For the years ended December 31, 2013 and 2012, the Company recorded a $1.4 million and
$1.6 million valuation allowance against certain deferred tax assets associated with capital losses with a
limited carryforward period, respectively. The Company anticipates the carryforward period will lapse
prior to utilization of the deferred tax assets.
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