Spirit Airlines 2012 Annual Report Download - page 81

Notes to Financial Statements—(Continued)
At December 31, 2012 and 2011 , the significant components of the Company's deferred taxes consisted of the following:
In assessing the realizability of the deferred tax assets, management considered whether it is more likely than not that some or all of the deferred tax assets would be
realized. In evaluating the Company's ability to utilize its deferred tax assets, it considered all available evidence, both positive and negative, in determining future taxable
income on a jurisdiction by jurisdiction basis.
Based on the expectation of future taxable income, the availability of reversing deferred tax liabilities, combined with achieving sustained profitability, management
determined that, as of December 31, 2010 , all of the Company's deferred tax assets would be realized in taxable years after 2010. Based on this determination the Company
eliminated its valuation allowance, which resulted in a reduction to the valuation allowance of $65.2 million , the recognition of a deferred tax benefit of $52.8 million , and
a total income tax benefit of $52.3 million for the period ending December 31, 2010 .
At December 31, 2011, the Company had available for federal income tax purposes an alternative minimum tax (“AMT”) credit carryforward of approximately $3.2
million , and net operating loss (“NOL”) carryforwards for federal income tax purposes of $20.8 million . The Company's NOL carryforwards at December 31, 2011
included an unrealized benefit of approximately $3.5 million related to share-based compensation that was recorded in equity during 2012. In accordance with ASC 718,
excess tax benefits are only recognized in the financial statements upon actual realization of the related tax benefit, which occurred in 2012 upon utilization of the remaining
NOLs and AMT credit carryforwards during the year.
The Company has fully utilized its AMT credit carryforwards of approximately $3.2 million and NOL carryforwards of approximately $20.8 million against federal
taxable income as of December 31, 2012 . The Company has state NOL carryforwards of approximately $2.2 million
which can be used to offset future state taxable income.
State net operating losses begin to expire in 2017.
During 2012 the Company recorded a foreign tax credit of $1.0 million
against its 2012 federal income tax liability which was fully utilized during the year. Previously
the Company deducted income taxes paid in foreign countries in arriving at federal taxable income.
80
December 31,
2012 2011
(in thousands)
Deferred tax assets:
Net operating loss
$
83
$
6,234
Deferred loss
—
1,440
Deferred revenue
5,829
5,985
Federal tax credits
—
3,176
Nondeductible accruals
6,744
5,452
Other
1,072
306
Gross deferred tax assets
13,728
22,593
Deferred tax assets, net
13,728
22,593
Deferred tax liabilities:
Capitalized interest
(1,125
)
(2,041
)
Deferred gain
(364
)
—
Fuel hedging
(97
)
(115
)
Accrued engine maintenance
(29,497
)
(10,232
)
Property, plant, and equipment
(3,271
)
(1,575
)
Gross deferred tax liabilities
(34,354
)
(13,963
)
Net deferred tax assets (liabilities)
$
(20,626
)
$
8,630
Deferred taxes included within:
Assets:
Other current assets
$
12,591
$
20,738
Liabilities:
Other long-term liabilities
(33,216
)
(12,108
)