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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Taxes |
Income Taxes | (4) Income Taxes The provision (benefit) for income taxes includes the following components (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ | ​ | 2019 | ​ | 2018 | ​ | 2017 |
Current tax provision (benefit): |  | ​ |  |  | ​ |  |  | ​ |  | ​
Federal | ​ | $ | (4,395) | ​ | $ | (21,598) | ​ | $ | 5,853 | ​
State | ​ |  | 891 | ​ |  | 1,465 | ​ |  | 180 | ​
Foreign | ​ | ​ | — | ​ | ​ | 1,575 | ​ | ​ | — | ​
​ | ​ |  | (3,504) | ​ |  | (18,558) | ​ |  | 6,033 | ​
Deferred tax provision (benefit): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ |  | 95,655 | ​ |  | 92,250 | ​ |  | (166,890) | ​
State | ​ |  | 14,055 | ​ |  | 12,250 | ​ |  | 20,133 | ​
​ | ​ |  | 109,710 | ​ |  | 104,500 | ​ |  | (146,757) | ​
Provision (benefit) for income taxes | ​ | $ | 106,206 | ​ | $ | 85,942 | ​ | $ | (140,724) | ​
​ The following is a reconciliation between a federal income tax rate of 21% in 2019 and 2018 and 35% for 2017 of income before income taxes and the effective tax rate which is derived by dividing the provision (benefit) for income taxes by the income before the provision for income taxes (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year ended December 31, |
​ | ​ | 2019 | ​ | 2018 | ​ | 2017 |
Computed provision for income taxes at the statutory rate |  | $ | 93,724 |  | $ | 76,926 |  | $ | 100,864 | ​
Increase (decrease) in income taxes resulting from: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
State income tax provision, net of federal income tax benefit | ​ |  | 15,645 | ​ |  | 12,711 | ​ |  | 7,778 | ​
Non-deductible expenses | ​ | ​ | 3,934 | ​ | ​ | 1,956 | ​ | ​ | 3,230 | ​
Valuation allowance changes affecting the provision for income taxes | ​ |  | (517) | ​ |  | (1,187) | ​ |  | 505 | ​
Foreign income taxes, net of federal & state benefit | ​ | ​ | — | ​ | ​ | 1,192 | ​ | ​ | — | ​
Excess tax benefits from share-based compensation | ​ | ​ | (3,525) | ​ | ​ | (4,548) | ​ | ​ | (5,377) | ​
Revaluation of net deferred taxes for the Tax Cuts and Jobs Act of 2017 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (246,845) | ​
Other, net | ​ |  | (3,055) | ​ |  | (1,108) | ​ |  | (879) | ​
Provision (benefit) for income taxes | ​ | $ | 106,206 | ​ | $ | 85,942 | ​ | $ | (140,724) | ​
​ For the year ended December 31, 2019, the Company released $0.5 million of valuation allowance against certain deferred tax assets primarily associated with ExpressJet state net operating losses. For the year ended December 31, 2018, the Company released $1.2 million valuation allowance, respectively against certain deferred tax assets primarily associated with ExpressJet state net operating losses with a limited carry forward period and Company capital losses with a limited carry forward period. For the year ended December 31, 2017, the Company recorded $0.5 million of valuation allowance against certain deferred tax assets primarily associated with ExpressJet state net operating losses. The decrease in the valuation allowance for 2019 was primarily based on changes in the Company's income tax projections which reduced the amount of deferred tax assets that are anticipated to expire before the deferred tax assets may be utilized. ​ The Company recorded a $3.5 million, $4.5 million and $5.4 million benefit from share-based compensation in 2019, 2018 and 2017, respectively, relating to ASU 2016-09 which, requires excess tax benefits and deficiencies to be recognized in the income tax provision during the period stock options are exercised and when stock awards vest. ​ The significant components of the Company’s net deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31, |
​ | ​ | 2019 | ​ | 2018 |
Deferred tax assets: |  | ​ |  |  | ​ |  | ​
Accrued benefits | ​ | $ | 20,848 | ​ | $ | 32,462 | ​
Net operating loss carryforward | ​ |  | 358,685 | ​ |  | 344,375 | ​
AMT credit carryforward | ​ |  | 4,397 | ​ |  | 15,744 | ​
Aircraft credits | ​ |  | 9,114 | ​ |  | 35,924 | ​
Accrued reserves and other | ​ |  | 17,225 | ​ |  | 18,710 | ​
Total deferred tax assets | ​ |  | 410,269 | ​ |  | 447,215 | ​
Valuation allowance | ​ |  | (892) | ​ |  | (9,455) | ​
Deferred tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accelerated depreciation | ​ |  | (1,032,957) | ​ |  | (955,919) | ​
Total deferred tax liabilities | ​ |  | (1,032,957) | ​ |  | (955,919) | ​
Net deferred tax liability | ​ | $ | (623,580) | ​ | $ | (518,159) | ​
​ The Company’s deferred tax liabilities were primarily generated through accelerated depreciation, combined with shorter depreciable tax lives, allowed under the IRS tax code for purchased aircraft and support equipment compared to the Company’s depreciation policy under GAAP for such assets using the straight-line method (see note 1 Nature of Operations and Summary of Significant Accounting Policies). ​ The Company's valuation allowance is related to certain deferred tax assets with a limited carry forward period where the Company does not anticipate utilizing these deferred tax assets prior to the lapse of the carry forward period. The Company's AMT credit carryforward includes credits from prior acquisitions. ​ At December 31, 2019 and 2018, the Company had federal net operating losses of approximately $1,581.1 million and $1,504.9 million and state net operating losses of approximately $766.4 million and $562.0 million, respectively. The estimated effective tax rate applicable to the federal and state net operating losses at December 31, 2019 was 21.0% and 3.36%, respectively. The Company anticipated that the federal and state net operating losses will start to expire in 2030 and 2020, respectively. The Company has recorded a valuation allowance for state net operating losses the Company anticipates will expire before the benefit will be realized due to the limited carry forward periods. As of December 31, 2019 and 2018, the Company also had an alternative minimum tax credit of approximately $4.4 million and $8.8 million, respectively, which does not expire. Under the Tax Cuts and Jobs Act of 2017, the Company will realize the alternative minimum tax credit either by offsetting regular tax due or as a refundable credit over the next two years. The Company has no ongoing federal or state examinations. Federal tax years 2016, 2017 and 2018 are open to examination. ​ Under ASC Topic 740, the accounting guidance related to uncertainty in tax positions requires that the impact of a tax position be recognized in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the year ended December 31, 2019 and 2018 is as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31, | ​
|  | 2019 |  | 2018 |
Unrecognized tax benefits at the beginning of year | ​ | $ | 14,553 | ​ | $ | 2,223 |
Gross increases - current year tax positions | ​ | ​ | — | ​ |  | 13,899 | ​
Gross increases - prior year tax positions | ​ | ​ | 67 | ​ |  | — | ​
Gross decreases - prior year tax positions | ​ |  | — | ​ |  | (1,569) | ​
Unrecognized tax benefits at end of year | ​ | $ | 14,620 | ​ | $ | 14,553 | ​
Interest and penalties in year-end balance | ​ | $ | 67 | ​ | $ | — | ​
​ For the year ending December 31, 2019, the Company has recorded $67,000 of interest expense related to uncertain tax positions not offset by the Company's tax attributes.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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