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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision
Components of income tax (provision) benefit |  |  |
| Year Ended December 31,
(in millions) | 2022 | 2021 | 2020
Current tax (provision) benefit: |  |  |
Federal | $ | — |  | $ | — |  | $ | 94 |
State and local | (1) |  | (1) |  | 3 |
International | (4) |  | (3) |  | (5) |
Deferred tax (provision) benefit: |  |  |
Federal | (525) |  | (130) |  | 2,766 |
State and local | (66) |  | 16 |  | 344 |
Income tax (provision) benefit | $ | (596) |  | $ | (118) |  | $ | 3,202 |
The following table presents the principal reasons for the difference between the effective tax rate and the U.S. federal statutory income tax rate:
Reconciliation of statutory federal income tax rate to the effective income tax rate |  |  |
| Year Ended December 31,
| 2022 | 2021 | 2020
U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
State taxes, net of federal benefit | 3.0 |  | (4.4) |  | 1.9 |
Permanent differences | 1.0 |  | 4.9 |  | (0.6) |
Valuation allowance | 7.3 |  | 9.1 |  | (2.6) |
Other | (1.1) |  | (0.8) |  | 0.8 |
Effective income tax rate | 31.2 | % | 29.8 | % | 20.5 | %
Deferred Taxes Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes.
Significant components of deferred income tax assets and liabilities |  |
| December 31,
(in millions) | 2022 | 2021
Deferred tax assets: |  |
Net operating loss carryforwards | $ | 1,395 |  | $ | 1,301 |
Capital loss carryforward | 50 |  | 480 |
Pension, postretirement and other benefits | 1,467 |  | 2,089 |
Investments | 1,106 |  | 314 |
Deferred revenue | 2,334 |  | 2,288 |
Lease liabilities | 2,376 |  | 2,452 |
Other | 682 |  | 494 |
Valuation allowance | (1,176) |  | (833) |
Total deferred tax assets | $ | 8,234 |  | $ | 8,585 |
Deferred tax liabilities: |  |
Depreciation | $ | 5,110 |  | $ | 4,463 |
Operating lease assets | 1,624 |  | 1,676 |
Intangible assets | 1,121 |  | 1,097 |
Other | 78 |  | 55 |
Total deferred tax liabilities | $ | 7,933 |  | $ | 7,291 |
Net deferred tax assets(1) | $ | 301 |  | $ | 1,294 |
(1)At December 31, 2022, the net deferred tax assets of $301 million included $325 million of net state deferred tax assets, which are recorded in deferred income taxes, net, and $24 million of net federal deferred tax liabilities, which are recorded in other noncurrent liabilities. At December 31, 2021, the net deferred tax assets of $1.3 billion were recorded in deferred income taxes, net. Valuation Allowance We periodically assess whether it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets. We establish valuation allowances if it is more likely than not that we will be unable to realize our deferred income tax assets. In making this determination, we consider available positive and negative evidence and make certain assumptions. We consider, among other things, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, our historical financial results and tax planning strategies. At December 31, 2022 our net deferred tax asset balance was $301 million, including a $1.2 billion valuation allowance primarily related to certain net realized and unrealized capital losses and certain state net operating losses. Although we have cumulative losses since the onset of the pandemic, we have a history of significant earnings prior to the onset of the COVID-19 pandemic. During 2022, we returned to profitability, as our business continued to recover from the impact of the pandemic. We are expecting to generate sufficient taxable income to utilize our federal net operating loss carryforwards before any expire. However, the generation of future taxable income is dependent on many factors, including those which are out of our control, such as the demand for air travel and overall health of the economy. As such, there are no guarantees that a valuation allowance will not be required against some or all of our deferred tax assets in future periods. As of December 31, 2022, w e had approximately $5.4 billion of U.S. federal pre-tax net operating loss carryforwards, of which $1.5 billion was generated prior to 2018 and will not begin to expire until 2029. Under current tax law, the remaining net operating loss carryforwards do not expire. Therefore, we have not recorded a valuation allowance on our deferred tax assets other than the certain net realized and unrealized capital losses and certain state net operating losses that have short expiration periods. The following table presents the balance of our valuation allowance on our deferred income tax assets and the associated activity:
Valuation allowance activity
(in millions) | 2022 | 2021
Balance at January 1 | $ | 833 |  | $ | 460 |
Tax provision | 155 |  | 26 |
Equity investment activity | 188 |  | 347 |
Balance at December 31 | $ | 1,176 |  | $ | 833 |
Other The amount of, and changes to, our uncertain tax positions were not material in any of the years presented. We are currently under audit by the IRS for the 2022, 2021 and 2020 tax years.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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