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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2012
Income Taxes |
Income Taxes | (5) Income Taxes The provision for income taxes includes the following components (in thousands):
|  | Year ended December 31, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |  | 2010 |
Current tax provision (benefit): |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |  | $ | (1,600 | )
State |  |  | 441 |  |  | 396 |  |  | 451 |
|  |  | 441 |  |  | 396 |  |  | (1,149 | )
Deferred tax provision (benefit): |  |  |  |  |  |  |  |  |  |
Federal |  |  | 31,791 |  |  | (21,533 | ) |  | 46,994 |
State |  |  | 2,507 |  |  | (1,698 | ) |  | 3,706 |
|  |  | 34,298 |  |  | (23,231 | ) |  | 50,700 |
Provision (benefit) for income taxes |  |  | 34,739 |  |  | (22,835 | ) |  | 49,551 |
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, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |  | 2010 |
Computed "expected" provision (benefit) for income taxes at the statutory rates |  | $ | 32,983 |  | $ | (14,683 | ) | $ | 52,888 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |  |  |  |  |
Purchase accounting (gain) adjustment |  |  | — |  |  | 1,999 |  |  | (5,455 | )
State income tax provision (benefit), net of Federal income tax benefit |  |  | 2,220 |  |  | (1,810 | ) |  | 3,485 |
Valuation allowance changes affecting the provision for income taxes |  |  | 1,614 |  |  | — |  |  | — |
Other, net |  |  | (2,078 | ) |  | (8,341 | ) |  | (1,367 | )
Provision (benefit) for income taxes |  |  | 34,739 |  |  | (22,835 | ) |  | 49,551 |
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 carryforward period. The Company anticipates the carryforward period will lapse prior to utilization of the deferred tax assets. For the year ended December 31, 2011 in conjunction with preparing the 2010 income tax return, the Company revised its estimate of the 2010 ExpressJet post-acquisition tax losses recorded as a deferred tax asset as of December 31, 2010. The change in estimate resulted in a tax benefit of $7.2 million, which is reflected in "Other, net" in the reconciliation above. The significant components of the net deferred tax assets and liabilities are as follows (in thousands):
|  | As of December 31, |
--- | --- | --- | ---
|  | 2012 |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |
Intangible Asset |  | $ | 37,031 |  | $ | 37,404 |
Accrued benefits |  |  | 40,469 |  |  | 35,460 |
Net operating loss carryforward |  |  | 118,448 |  |  | 128,134 |
AMT credit carryforward |  |  | 15,882 |  |  | 15,882 |
Deferred aircraft credits |  |  | 48,124 |  |  | 49,867 |
Accrued reserves and other |  |  | 31,846 |  |  | 24,538 |
Total deferred tax assets |  |  | 291,800 |  |  | 291,285 |
Valuation allowance |  |  | (1,614 | ) |  | — |
Deferred tax liabilities: |  |  |  |  |  |  |
Accelerated depreciation |  |  | (823,487 | ) |  | (789,641 | )
Total deferred tax liabilities |  |  | (823,487 | ) |  | (789,641 | )
Net deferred tax liability |  |  | (533,301 |  | $ | (498,356 | )
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. The Company's valuation allowance is related to certain deferred tax assets with a limited carry-forward period. The Company does not anticipate utilizing these deferred tax assets prior to the lapse of the carry-forward period. At December 31, 2012, the Company had federal net operating losses of approximately $272.0 million and state net operating losses of approximately $736.5 million, which will start to expire in 2026 and 2016, respectively. As of December 31, 2012, the Company also had an alternative minimum tax credit of approximately $15.9 million which does not expire. In conjunction with the ExpressJet Merger, the Company acquired non-amortizable intangible tax assets and other tax assets that are not anticipated to provide a tax benefit until 2025 or later due to statutory limitations. Because of the uncertainty associated with the realization of those tax assets, the Company has a full valuation allowance of approximately $73.0 million on such tax assets as of December 31, 2012 and 2011. The Company also has a valuation allowance against deferred tax assets of approximately $1 million for net operating losses in states with short carry-forward periods. The deferred tax assets in the table above are shown net of these valuation allowance.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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