REPUBLIC AIRWAYS HOLDINGS INC.RJET
REPUBLIC AIRWAYS HOLDINGS INC. Income Taxes Disclosure
INCOME TAXES
The components of income tax expense for the years ended December 31, are as follows:
(in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
Federal: | ||||||||||||||||||||
Deferred | $ | 43.7 | $ | 18.8 | $ | 19.5 | ||||||||||||||
Total Federal | $ | 43.7 | $ | 18.8 | $ | 19.5 | ||||||||||||||
State: | ||||||||||||||||||||
Current | $ | 3.3 | $ | 5.1 | $ | 3.8 | ||||||||||||||
Deferred | 4.5 | 2.0 | 13.6 | |||||||||||||||||
Total State | 7.8 | 7.1 | 17.4 | |||||||||||||||||
Change in valuation allowance | (12.4) | (2.1) | (3.4) | |||||||||||||||||
Benefit for uncertain tax positions | (1.9) | (1.5) | (0.3) | |||||||||||||||||
Income tax expense | $ | 37.2 | $ | 22.3 | $ | 33.2 | ||||||||||||||
A reconciliation of income tax expense at the applicable federal statutory income tax rate of 21.0% to the tax provision as reported for the years ended December 31 is as follows. As a result of adopting ASU 2023-09, the disaggregated components for the years ended December 31, 2024 and 2023 were recast to conform with the presentation of the 2025 year.
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||
| US federal statutory rate | $ | 23.8 | 21.0 | $ | 18.2 | 21.0 | $ | 18.5 | 21.0 | |||||||||||||||||||||||||||||
State and local income tax, net of federal effect (1) | 5.5 | 5.0 | 5.0 | 5.7 | 14.7 | 16.7 | ||||||||||||||||||||||||||||||||
Changes in valuation allowances | (10.0) | (8.8) | — | — | (0.6) | (0.7) | ||||||||||||||||||||||||||||||||
Changes in uncertain tax positions | (1.9) | (1.7) | (1.5) | (1.7) | (0.3) | (0.3) | ||||||||||||||||||||||||||||||||
Nontaxable or nondeductible items, net: | ||||||||||||||||||||||||||||||||||||||
Meals and entertainment disallowance | 1.3 | 1.1 | 1.2 | 1.4 | 1.1 | 1.2 | ||||||||||||||||||||||||||||||||
| Limit on executive compensation | 3.8 | 3.4 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Excess tax benefits from share based compensation | (1.2) | (1.1) | — | — | — | — | ||||||||||||||||||||||||||||||||
| Transaction costs | 3.0 | 2.6 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Other | (0.2) | (0.2) | (0.6) | (0.7) | (0.2) | (0.2) | ||||||||||||||||||||||||||||||||
| Other adjustments to deferred items | ||||||||||||||||||||||||||||||||||||||
| Temporary differences - 162(m) | 3.1 | 2.7 | — | — | — | — | ||||||||||||||||||||||||||||||||
Tax attributes - Net Operating Loss (“NOL”) expiration | 10.0 | 8.8 | — | — | — | — | ||||||||||||||||||||||||||||||||
Effective tax rate | $ | 37.2 | 32.8 | $ | 22.3 | 25.7 | $ | 33.2 | 37.7 | |||||||||||||||||||||||||||||
(1)The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category are Massachusetts, New York City, New York State, and Virginia for each of the three years ended December 31, 2025, 2024, and 2023.
Deferred income tax assets (liabilities) as of December 31 are comprised of the following:
(in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
DEFERRED TAX ASSETS: | ||||||||||||||||||||
Federal and state NOL carryforwards, net of liability for uncertain tax positions | $ | 125.8 | $ | 90.2 | $ | 123.7 | ||||||||||||||
Nondeductible accrual amounts | 9.6 | 8.1 | 5.9 | |||||||||||||||||
| Accrued compensation | 19.3 | 19.9 | 18.5 | |||||||||||||||||
| Deferred revenue and contract liabilities | 34.2 | 15.1 | 7.4 | |||||||||||||||||
| Operating lease liabilities | 34.7 | 32.4 | 34.4 | |||||||||||||||||
| Interest expense carryforward | 17.1 | — | — | |||||||||||||||||
| Other | 3.5 | 1.8 | — | |||||||||||||||||
Total deferred tax assets | 244.2 | 167.5 | 189.9 | |||||||||||||||||
Valuation allowance (1) | (82.7) | (36.4) | (38.5) | |||||||||||||||||
Total deferred tax assets, net of valuation allowance | 161.5 | 131.1 | 151.4 | |||||||||||||||||
DEFERRED TAX LIABILITIES: | ||||||||||||||||||||
Accelerated depreciation and fixed asset basis differences for tax purposes | (349.7) | (306.7) | (307.5) | |||||||||||||||||
Right-of-use assets | (32.7) | (30.4) | (32.7) | |||||||||||||||||
Total deferred tax liabilities | (382.4) | (337.1) | (340.2) | |||||||||||||||||
Total net deferred tax liabilities | $ | (220.9) | $ | (206.0) | $ | (188.8) | ||||||||||||||
(1)Change in valuation allowance includes the Mesa valuation allowance as of the Merger closing date, which does not impact provision for income tax expense.
The Company’s deferred tax assets were generated as a result of temporary differences between deductibility of reserves, accruals, and operating lease liabilities and recognition of revenue for the determination of income on a tax basis versus a U.S. GAAP basis combined with significant NOLs. Deferred tax liabilities relate predominantly to differences in U.S. GAAP and tax basis of aircraft and equipment and the related right of use assets created as the present value of remaining lease payments at the measurement date. The Company accelerates depreciation for tax reporting purposes for new aircraft and equipment deliveries.
The Company monitors ongoing tax cases related to its unrecognized tax benefits. The unrecognized tax benefits, which if recognized, would impact the effective tax rate. As of December 31, 2025 the Company has reversed all liabilities related to unrecognized tax benefits due to the expiration of the statute of limitations.
The following table reconciles the Company’s tax liability for uncertain tax positions for the years ended December 31 as follows:
(in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
Balance at the beginning of the period | $ | 1.9 | $ | 3.4 | $ | 3.5 | ||||||||||||||
| Additions for tax positions taken in prior years | — | — | 0.2 | |||||||||||||||||
Reductions for tax positions due to expiration of statute of limitations | (1.9) | (1.5) | (0.3) | |||||||||||||||||
Balance at the end of the period | $ | — | $ | 1.9 | $ | 3.4 | ||||||||||||||
As of December 31, 2025, the Company has Federal NOL carryforwards totaling approximately $300 million, of which a portion begin expiring during 2036. Approximately $190 million of our Federal NOL carryforwards are not subject to expiration. These NOL carryovers are only available to offset 80% of taxable income in years in which they are utilized due to tax law changes as a result of the Tax Cuts and Jobs Act. The Company also has $70 million of interest expense carryovers as a result of 163(j) limitations as of December 31, 2025, which do not expire. Tax years beginning in 2007 through 2025 are currently subject to examination by the Internal Revenue Service.
The Company cannot conclude that it is more likely than not that the benefit from certain Federal and state NOL carryforwards will be realized. In recognition of this uncertainty, the Company has provided a valuation allowance of $82.7 million and $36.4 million as of December 31, 2025 and 2024, respectively, on the deferred tax assets related to these NOL carryforwards. If or when recognized, the tax benefits related to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of income tax expense.
The following table reconciles the Company’s valuation allowance for the years ended December 31 as follows:
(in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
Balance at the beginning of the period | $ | 36.4 | $ | 38.5 | $ | 41.9 | ||||||||||||||
| Reductions for expiration of NOLs previously reserved | (10.0) | — | — | |||||||||||||||||
| Additional allowance recorded in the Merger | 58.7 | — | — | |||||||||||||||||
Reductions for current year change in estimates | (2.4) | (2.1) | (3.4) | |||||||||||||||||
Balance at the end of the period | $ | 82.7 | $ | 36.4 | $ | 38.5 | ||||||||||||||
Income taxes paid (net of refunds) for tax years ended December 31 by jurisdiction (in millions):
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| US Federal | $ | — | $ | — | $ | — | ||||||||||||||
| State and Local | 2.8 | 5.7 | 3.3 | |||||||||||||||||
| New York City | 1.7 | 2.5 | 2.1 | |||||||||||||||||
| New York State | 0.9 | 1.0 | 0.1 | |||||||||||||||||
| Massachusetts | 0.3 | 1.4 | 0.8 | |||||||||||||||||
| Pennsylvania | 0.3 | 0.2 | — | |||||||||||||||||
| New Jersey | — | 0.2 | 0.3 | |||||||||||||||||
| Tennessee | — | 0.3 | — | |||||||||||||||||
| Indiana | (0.7) | — | — | |||||||||||||||||
| Other | 0.3 | 0.1 | — | |||||||||||||||||
Total income taxes paid, net of refunds | $ | 2.8 | $ | 5.7 | $ | 3.3 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 19, 2026 | Showing above |
| 2024 | May 14, 2025 | |
| 2023 | Jan 26, 2024 | |
| 2022 | Dec 29, 2022 | |
| 2021 | Dec 10, 2021 | |
| 2020 | Dec 14, 2020 | |
| 2019 | Dec 17, 2019 | |
| 2018 | Dec 20, 2018 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.