Southwest Airlines 1994 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 1994 Southwest Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 42

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42

Notes to Consolidated Financial Statements
Southwest Airlines – 1994 Annual Report Page 35
The provision for income taxes before the cumulative effect of accounting changes is comprised of the
following (in thousands):
Liability Method Deferred Method
1994 1993 1992
Current:
Federal $59,603 $46,744 $30,586
State 10,702 5,409 3,970
Total current 70,305 52,153 34,556
Deferred:
Federal 46,470 48,524 18,144
State 3,417 4,676 3,116
Total deferred 49,887 53,200 21,260
$120,192 $105,353 $55,816
The components of the provision for deferred income taxes as reported under the previous method of
accounting for the year ended December 31, 1992 are as follows (in thousands):
1992
Depreciation $27,947
Deferred gains on sale\leasebacks (4,275)
Scheduled airframe overhauls 6,336
Vacation pay (1,220)
Alternative minimum tax (10,645)
Other, net 3,117
$21,260
In January 1994, Southwest received an examination report from the Internal Revenue Service proposing
certain adjustments to Southwest's income tax returns for 1987 and 1988. The adjustments relate to
certain types of aircraft financings consummated by Southwest, as well as other members of the aviation
industry during that time period. Southwest intends to vigorously protest the adjustments proposed with
which it does not agree. The industry's difference with the IRS involves complex issues of law and fact
that are likely to take a substantial period of time to resolve. Management believes that final resolution of
such protest will not have a materially adverse effect upon the results of operations of Southwest.