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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income before income taxes are as follows:

 Years ended December 31,
 20242023
 (in thousands)
United States$165,339 $73,853 
Foreign(12,694)(6,723)
Income before income taxes$152,645 $67,130 

The components of income tax expense for the years ended December 31, 2024 and 2023 were as follows:

 FederalStateForeignTotal
 (in thousands)
2024    
Current$2,331 $2,916 $205 $5,452 
Deferred38,871 (290)— 38,581 
Total$41,202 $2,626 $205 $44,033 
2023
Current$2,449 $1,387 $(139)$3,697 
Deferred16,338 3,314 — 19,652 
Total$18,787 $4,701 $(139)$23,349 

The following is a reconciliation of the federal income tax expense at the statutory rate of 21% for the years ended December 31, 2024 and 2023 to the effective income tax expense:

 Years Ended December 31,
 20242023
 (in thousands)
Statutory federal income tax expense$32,055 $14,097 
State taxes, net of federal benefit2,014 4,410 
Foreign tax paid(559)(169)
Foreign jurisdiction rate differential445 545 
Permanent differences - nondeductible executive compensation6,553 2,929 
Permanent differences and other1,355 1,046 
Valuation allowance2,170 491 
Effective income tax expense$44,033 $23,349 

Permanent differences and other includes Subpart F income of $1.4 million from foreign operations for the year ended December 31, 2024. 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, 2022$19 
Increases related to current year tax positions435 
Decreases due to tax positions expired(5)
Balance as of December 31, 2023449 
Increases related to current year tax positions123 
Decreases due to tax positions expired(5)
Balance as of December 31, 2024$567 

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,
 20242023
 (in thousands)
Deferred tax assets:  
Unearned lease revenue$8,335 $9,614 
State taxes590 167 
Inventory2,770 2,426 
Reserves and allowances4,629 5,471 
Other accruals46,144 29,231 
Lease liability584 934 
Net operating loss carry forward40,906 51,240 
Charitable contributions— 2 
Total deferred tax assets103,958 99,085 
Less: valuation allowance(3,137)(978)
Net deferred tax assets100,821 98,107 
Deferred tax liabilities:
Depreciation and impairment on aircraft engines and equipment(272,492)(231,694)
Notes receivable(5,181)(5,405)
Lease liability(597)(930)
Other deferred tax liabilities(5,619)(4,622)
Net deferred tax liabilities(283,889)(242,651)
Other comprehensive income deferred tax liability(1,981)(3,235)
Net deferred tax liabilities$(185,049)$(147,779)
As of December 31, 2024, the Company had net operating loss carry forwards of approximately $177.4 million for federal tax purposes, $0.7 million (tax effected) for state tax purposes, and $12.2 million for foreign 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 $0.4 million valuation allowance for net operating losses in California that expires between 2034 and 2042 and a $0.1 million valuation allowance for net operating losses in Georgia that expires between 2032 and 2040. As of December 31, 2024, the Company had a $2.7 million valuation allowance for net operating losses in the UK, and there is a $3.1 million net operating loss carryforward in the UK that can be carried forward indefinitely. 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 Company files U.S. federal, state, and foreign tax returns. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple foreign and state jurisdictions. The tax years that remain subject to examination are from 2021 onwards. To the extent that the Company claims a net operating loss carryforward against future taxable income, those losses may be examined by the taxing authorities. The net change in the total valuation allowance during the year ended December 31, 2024 was $2.2 million.
It is the Company’s intention to reinvest undistributed earnings of their wholly-owned foreign operations and thereby indefinitely postpone their remittance. A determination of the deferred tax liability is not practical. Accordingly, no provision has been made for foreign withholding taxes or U.S. income taxes.