SkyWest Airlines 2014 Annual Report Download - page 90

SKYWEST, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2014
(4) 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 for income taxes by income (loss) before for
income taxes (in thousands):
Year ended December 31,
2014 2013 2012
Computed provision (benefit) for income taxes at the statutory rate .... $(5,720) $34,486 $30,064
Increase (decrease) in income taxes resulting from:
State income tax provision (benefit), net of federal income tax benefit . (107) 2,867 2,220
Non-deductible expenses .................................. 3,865 3,257 2,919
Valuation allowance changes affecting the provision for income taxes . . 5,981 1,430 1,614
Foreign income taxes, net of federal & state benefit .............. 1,973 — —
Other, net ............................................. 1,819 (2,464) (2,078)
Provision for income taxes .................................. $7,811 $39,576 $34,739
For the year ended December 31, 2014, the Company recorded a $6.0 million valuation allowance
against certain deferred tax assets primarily associated with ExpressJet state net operating losses with a
limited carry forward period. The valuation allowance was based on the Company’s assessment of
deferred tax assets that are anticipated to expire before the deferred tax assets may be utilized. The
Company additionally recorded a $2.0 million foreign tax expense associated with Brazilian withholding
tax on the sale of the Company’s equity ownership in TRIP. Included in Other, net above is an
unrecorded tax benefit of $3.4 million related to losses resulting from the disposition of a paint facility
in Mexico.
For the year ended December 31, 2013, the Company recorded a $1.4 million valuation allowance
against certain deferred tax assets primarily associated with ExpressJet state net operating losses with a
limited carry forward period. The valuation allowance was based on the Company’s assessment at
December 31, 2013 of deferred tax assets that were anticipated to expire before the deferred tax assets
may be utilized.
For the year ended December 31, 2012, the Company recorded a $1.6 million valuation allowance
against certain deferred tax assets associated with capital losses with a limited carry forward period.
The valuation allowance was based on the Company’s assessment at December 31, 2012 of deferred tax
assets that were anticipated to expire before the deferred tax assets may be utilized.
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