XML 33 R17.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Taxes |
Income Taxes | (9) Income Taxes The components of income from continuing operations before income taxes are as follows
|  | Years ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
|  | (in thousands) |
U.S. |  | $ | 12,688 |  | $ | 10,535 |  | $ | 10,408 |
Non U.S. |  |  | 1,456 |  |  | 1,307 |  |  | 892 |
Income from continuing operations before income taxes |  | $ | 14,144 |  | $ | 11,842 |  | $ | 11,300 |
The components of income tax expense for the years ended December 31, 201 5, 201 4, and 201 3, included in the accompanying consolidated statements of income were as follows:
|  | Federal |  | State |  | Foreign |  | Total |
|  | (in thousands) |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (208) |  | $ | 13 |  | $ | 476 |  | $ | 281 |
Deferred |  |  | 5,332 |  |  | 1,175 |  |  | — |  |  | 6,507 |
Total 2015 |  | $ | 5,124 |  | $ | 1,188 |  | $ | 476 |  | $ | 6,788 |
December 31, 2014 |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | 109 |  | $ | 179 |  | $ | 311 |  | $ | 599 |
Deferred |  |  | 3,832 |  |  | 164 |  |  | — |  |  | 3,996 |
Total 2014 |  | $ | 3,941 |  | $ | 343 |  | $ | 311 |  | $ | 4,595 |
December 31, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | $ | (155) |  | $ | 123 |  | $ | 95 |  | $ | 63 |
Deferred |  |  | (3,755) |  |  | (634) |  |  | — |  |  | (4,389) |
Total 2013 |  | $ | (3,910) |  | $ | (511) |  | $ | 95 |  | $ | (4,326) |
The following is a reconciliation of the federal income tax expense at the statutory rate of 34% to the effective income tax expense:
|  | Years Ended December 31, |
|  | 2015 |  | 2014 |  | 2013 |
|  | (in thousands and % of pre-tax income) |
|  | $ |  | % |  | $ |  | % |  | $ |  | % |
Statutory federal income tax expense |  |  | 4,809 |  | 34.0 |  |  | 4,027 |  | 34.0 |  |  | 3,842 |  | 34.0 |
State taxes, net of federal benefit |  |  | 784 |  | 5.5 |  |  | 117 |  | 1.0 |  |  | (338) |  | (3.0) |
Foreign tax paid |  |  | 476 |  | 3.4 |  |  | 101 |  | 0.9 |  |  | 95 |  | 0.8 |
Tax consequences of the sale of engines to WMES |  |  | (306) |  | (2.1) |  |  | (36) |  | (0.3) |  |  | (36) |  | (0.3) |
Uncertain tax positions |  |  | (195) |  | (1.4) |  |  | (101) |  | (0.9) |  |  | 160 |  | 1.4 |
Permanent differences-nondeductible executive compensation |  |  | 1,117 |  | 7.9 |  |  | 768 |  | 6.5 |  |  | 732 |  | 6.5 |
ETI basis restoration |  |  | — |  | — |  |  | — |  | — |  |  | (8,728) |  | (77.2) |
Permanent differences and other |  |  | 103 |  | 0.7 |  |  | (281) |  | (2.4) |  |  | (53) |  | (0.5) |
Effective income tax expense (benefit) |  |  | 6,788 |  | 48.0 |  |  | 4,595 |  | 38.8 |  |  | (4,326) |  | (38.3) |
In 2013, we recorded an income tax benefit of $8.7 million related to an extraterritorial income (“ETI”) adjustment for certain of our engines. We recognized this income tax benefit in 2013 resulting from adjustments made to the tax basis of certain of our engines due to a decision in a recent court case on behalf of another company in which our circumstances are similar. The Company records tax expense or benefit for unusual or infrequent items discretely in the period in which they occur. The following table summarizes the activity related to the Company’s unrecognized tax benefits:
|  | (in thousands) |
Balance as of December 31, 2013 |  | $ | 566 |
Increases related to current year tax positions |  |  | 109 |
Decreases due to tax positions released |  |  | (211) |
Balance as of December 31, 2014 |  |  | 464 |
Increases related to current year tax positions |  |  | 5 |
Decreases due to tax positions expired |  |  | (195) |
Balance as of December 31, 2015 |  | $ | 274 |
As of December 31, 2013 we reserved $0.2 million for the benefit resulting from the Extraterritorial Income Exclusion. No reserve was established as of December 31, 2015 and December 31, 2014 for the exposure in Europe. If the Company is able to eventually recognize these uncertain tax positions, all of the unrecognized benefit would reduce the Company’s effective tax rate. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:
|  | As of December 31, |
|  | 2015 |  | 2014 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |
Unearned lease revenue |  | $ | 1,511 |  | $ | 1,368 |
State taxes |  |  | 944 |  |  | 564 |
Reserves and allowances |  |  | 898 |  |  | 938 |
Other accruals |  |  | 1,767 |  |  | 582 |
Alternative minimum tax credit |  |  | 377 |  |  | 377 |
Net operating loss carry forward |  |  | 35,827 |  |  | 37,173 |
Charitable contributions |  |  | 42 |  |  | 28 |
Total deferred tax assets |  |  | 41,366 |  |  | 41,030 |
Less: valuation allowance |  |  | (1,280) |  |  | (1,310) |
Net deferred tax assets |  |  | 40,086 |  |  | 39,720 |
Deferred tax liabilities: |  |  |  |  |  |  |
Depreciation and impairment on aircraft engines and equipment |  |  | (138,084) |  |  | (129,332) |
Other deferred tax assets (liabilities) |  |  | 981 |  |  | (898) |
Net deferred tax liabilities |  |  | (137,103) |  |  | (130,230) |
Other comprehensive loss deferred tax asset |  |  | 275 |  |  | — |
Net deferred tax liabilities |  | $ | (96,742) |  | $ | (90,510) |
As of December 31, 201 5, we had net operating loss carry forwards of approximately $100.5 million for federal tax purposes and $3.9 million for state tax purposes. The federal net operating loss carry forwards will expire at various times from 202 3 to 203 4 and the state net operating loss carry forwards will expire at various time s from 2016 to 2024. During 2014, a valuation allowance of $1.3 million was established for the net operating losses expiring in California for the periods 2016 to 2024. The Company’s ability to utilize the net operating loss and tax credit carry forwards in the future may be subject to restriction in the event of past or future ownership changes as defined in Section 382 of the Internal Revenue Code and similar state tax law. As of December 31, 201 5, we also had alternative minimum tax credit of approximately $0.4 million for federal income tax purposes which has no expiration date and which should be available to offset future regular tax liabilities. Management believes that no valuation allowance is required on deferred tax assets related to federal net operating loss carry forwards, as it is more likely than not that all amounts are recoverable through future taxable income. Deferred tax assets relating to tax benefits of employee stock option grants have been reduced to reflect exercises in 201 5. Some exercises resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant (“windfall”). Although these additional tax benefits are reflected in net operating tax loss carryforwards, pursuant to ASC 718, in the amount of $3.0 million as of December 31, 201 5, the additional tax benefit associated with the windfall is not recognized until the deduction reduces taxes payable. The tax effect of windfalls included in net operating loss carryforwards but not reflected in deferred tax assets for 201 5 are $1.0 million and will be recorded to paid-in capital when recognized.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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 3: 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 4: 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 5: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration