XML 324 R17.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes are as follows:

 Years ended December 31,
 20232022
 (in thousands)
United States$73,853 $11,864 
Foreign(6,723)(2,071)
Income before income taxes$67,130 $9,793 

The components of income tax expense for the years ended December 31, 2023 and 2022 were as follows:

 FederalStateForeignTotal
 (in thousands)
2023    
Current$2,449 $1,387 $(139)$3,697 
Deferred16,338 3,314 — 19,652 
Total$18,787 $4,701 $(139)$23,349 
2022
Current$— $128 $2,161 $2,289 
Deferred3,758 (1,693)— 2,065 
Total$3,758 $(1,565)$2,161 $4,354 

The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2023 and 2022 to the effective income tax expense:

 Years Ended December 31,
 20232022
 (in thousands)
Statutory federal income tax expense$14,097 $2,057 
State taxes, net of federal benefit4,410 (1,593)
Foreign tax paid(169)1,509 
Foreign jurisdiction rate differential545 666 
Permanent differences-nondeductible executive compensation2,929 2,180 
Permanent differences and other1,537 (465)
Effective income tax expense$23,349 $4,354 

Permanent differences and other includes Subpart F income of $1.3 million from foreign operations for the year ended December 31, 2023. 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, 2021$13 
Increases related to current year tax positions11 
Decreases due to tax positions expired(5)
Balance as of December 31, 202219 
Increases related to current year tax positions435 
Decreases due to tax positions expired(5)
Balance as of December 31, 2023$449 

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,
 20232022
 (in thousands)
Deferred tax assets:  
Unearned lease revenue$9,614 $3,867 
State taxes167 2 
Inventory2,426 2,123 
Reserves and allowances5,471 4,425 
Other accruals29,231 15,973 
Lease liability934 1,366 
Net operating loss carry forward51,240 67,595 
California alternative minimum tax credit— 33 
Charitable contributions2 2 
Total deferred tax assets99,085 95,386 
Less: valuation allowance(978)(536)
Net deferred tax assets98,107 94,850 
Deferred tax liabilities:
Depreciation and impairment on aircraft engines and equipment(231,694)(208,389)
Notes receivable(5,405)(5,479)
Lease liability(930)(1,360)
Other deferred tax liabilities(4,622)(4,590)
Net deferred tax liabilities(242,651)(219,818)
Other comprehensive income deferred tax liability(3,235)(7,548)
Net deferred tax liabilities$(147,779)$(132,516)

As of December 31, 2023, the Company had net operating loss carry forwards of approximately $235.4 million for federal tax purposes and $1.0 million (tax effected) for state tax purposes. The majority of the federal net operating loss carry forwards were generated in 2020 and can be carried forward indefinitely, and the state net operating loss carry forwards will expire at various times from 2026 to 2043. There is a $0.5 million valuation allowance for net operating losses in California that expire between 2034 and 2042 and a $0.1 million valuation allowance for net operating losses in Georgia that expire between 2032 and 2040. 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. 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. The open tax years for federal and state tax purposes are from 2006 to 2023.
It is the Company’s intention to reinvest undistributed earnings of their wholly-owned foreign operations and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes.