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INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision
Components of income tax provision |  |  |
| Year Ended December 31,
(in millions) | 2024 | 2023 | 2022
Current tax provision: |  |  |
Federal | $ | — |  | $ | — |  | $ | — |
State and local | (35) |  | (8) |  | (1) |
International | (11) |  | (11) |  | (4) |
Deferred tax (provision) benefit: |  |  |
Federal | (1,038) |  | (896) |  | (525) |
State and local | (117) |  | (84) |  | (66) |
Income tax provision | $ | (1,201) |  | $ | (999) |  | $ | (596) |
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,
| 2024 | 2023 | 2022
U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
State taxes, net of federal benefit | 2.6 |  | 2.0 |  | 3.0 |
Permanent differences | 1.0 |  | 0.7 |  | 1.0 |
Valuation allowance | 1.9 |  | (5.0) |  | 7.3 |
Other | (0.7) |  | (0.9) |  | (1.1) |
Effective income tax rate | 25.8 | % | 17.8 | % | 31.2 | %
Deferred Taxes We account for deferred income taxes under the asset and liability method. We recognize deferred tax assets and liabilities based on the tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by current enacted tax rates. Deferred tax assets and liabilities are net by jurisdiction and are recorded as noncurrent on the balance sheets. We have elected to recognize global intangible low tax income in the period it arises and do not recognize deferred taxes for basis differences that may reverse in future years. 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) | 2024 | 2023
Deferred tax assets: |  |
Net operating loss carryforwards | $ | 799 |  | $ | 1,217 |
Capital loss carryforward | — |  | 8 |
Pension, postretirement and other benefits | 1,205 |  | 1,488 |
Investments | 936 |  | 806 |
Deferred revenue | 2,158 |  | 2,110 |
Lease liabilities | 2,816 |  | 2,193 |
Other | 608 |  | 709 |
Valuation allowance | (951) |  | (877) |
Total deferred tax assets | $ | 7,571 |  | $ | 7,654 |
Deferred tax liabilities: |  |
Depreciation | $ | 7,040 |  | $ | 5,570 |
Operating lease assets | 1,369 |  | 1,533 |
Intangible assets | 1,165 |  | 1,143 |
Other | 78 |  | 73 |
Total deferred tax liabilities | $ | 9,652 |  | $ | 8,319 |
Balance Sheet Position: |  |
Other noncurrent assets | $ | 95 |  | $ | 243 |
Deferred income taxes, net | 2,176 |  | 908 |
Net deferred tax liabilities | $ | 2,081 |  | $ | 665 |
Valuation Allowance A valuation allowance is recorded to reduce deferred tax assets when necessary. 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, 2024 our net deferred tax liability balance was $2.1 billion, including a $951 million valuation allowance primarily related to certain net realized and unrealized capital losses and certain state net operating losses. As of December 31, 2024, we had approximately $2.7 billion of U.S. federal pre-tax net operating loss carryforwards which we are expecting to utilize during 2025. These net operating loss carryforwards were primarily generated in 2020 and 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) | 2024 | 2023
Balance at January 1 | $ | 877 |  | $ | 1,176 |
Tax provision | 74 |  | (299) |
Balance at December 31 | $ | 951 |  | $ | 877 |
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 2024 and 2023 tax years.

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