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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense is summarized as follows:
| Year Ended December 31,
(In millions) | 2024 |  | 2023 |  | 2022
Current |  |  |  |  |
Federal | $ | 343 |  |  | $ | 387 |  |  | $ | 791 |
State | 26 |  |  | 42 |  |  | 78 |
| 369 |  |  | 429 |  |  | 869 |
Deferred |  |  |  |  |
Federal | (72) |  |  | 52 |  |  | 217 |
State | (73) |  |  | 22 |  |  | 18 |
| (145) |  |  | 74 |  |  | 235 |
Income tax expense | $ | 224 |  |  | $ | 503 |  |  | $ | 1,104 |
Income tax expense was different than the amounts computed by applying the statutory federal income tax rate as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
(In millions, except rates) | Amount |  | Rate |  | Amount |  | Rate |  | Amount |  | Rate
Computed “expected” federal income tax | $ | 283 |  |  | 21.00 | % |  | $ | 447 |  |  | 21.00 | % |  | $ | 1,085 |  |  | 21.00 | %
State income tax, net of federal income tax benefit | 10 |  |  | 0.71 | % |  | 29 |  |  | 1.35 | % |  | 93 |  |  | 1.80 | %
Deferred tax adjustment related to change in overall state tax rate | (26) |  |  | (1.96) | % |  | 16 |  |  | 0.73 | % |  | (23) |  |  | (0.45) | %
Valuation allowance | (42) |  |  | (3.09) | % |  | 3 |  |  | 0.13 | % |  | (66) |  |  | (1.28) | %
Excess executive compensation | 9 |  |  | 0.66 | % |  | 11 |  |  | 0.50 | % |  | 10 |  |  | 0.20 | %
Reserve on uncertain tax positions | (4) |  |  | (0.29) | % |  | 6 |  |  | 0.31 | % |  | 6 |  |  | 0.12 | %
Tax credits generated | (15) |  |  | (1.14) | % |  | (14) |  |  | (0.65) | % |  | (34) |  |  | (0.66) | %
Other, net | 9 |  |  | 0.77 | % |  | 5 |  |  | 0.27 | % |  | 33 |  |  | 0.62 | %
Income tax expense | $ | 224 |  |  | 16.66 | % |  | $ | 503 |  |  | 23.64 | % |  | $ | 1,104 |  |  | 21.35 | %
In 2024, the Company's overall effective tax rate decreased compared to 2023, primarily due to tax benefits recorded in 2024 compared to tax expenses recorded in 2023 from the release of valuation allowances associated with state net operating loss carryforwards and expiring capital loss carryforwards and deferred tax adjustments related to changes in the overall state tax rate. The overall effective tax rate increased in 2023 compared to 2022, primarily due to tax expenses recorded in 2023 compared to tax benefits recorded in 2022 from the release of valuation allowances associated with state net operating loss carryforwards and deferred tax adjustments related to changes in the overall state tax rate. The composition of net deferred tax liabilities is as follows:
| December 31,
(In millions) | 2024 |  | 2023
Deferred Tax Assets |  |  |
Net operating losses | $ | 166 |  |  | $ | 173 |
Incentive compensation | 44 |  |  | 47 |
Deferred compensation | 1 |  |  | 5 |
Capital loss carryforward | — |  |  | 16 |
Leases | 19 |  |  | 96 |
Derivative instruments | 2 |  |  | — |
Other | 45 |  |  | 42 |
Less: valuation allowance | (72) |  |  | (114) |
Total | 205 |  |  | 265 |
Deferred Tax Liabilities |  |  |
Properties and equipment | 3,456 |  |  | 3,558 |
Leases | 22 |  |  | 98 |
Derivative instruments | — |  |  | 21 |
Other | 1 |  |  | 1 |
Total | 3,479 |  |  | 3,678 |
Net deferred tax liabilities | $ | 3,274 |  |  | $ | 3,413 |
At December 31, 2024, the Company had federal net operating loss carryforwards of approximately $357 million, of which $293 million is subject to expiration in years 2035 through 2037, and of which $65 million does not expire. The Company had a valuation allowance on $38 million of the federal net operating loss carryforwards, but believes the remaining $319 million will be fully utilized prior to expiration. The Company had gross state net operating loss carryforwards of $2.6 billion at December 31, 2024, primarily expiring between 2025 and 2043, with all but $936 million covered by a valuation allowance. The Company also had other credit carryforwards of $11 million at December 31, 2024 that are offset by $4 million of valuation allowances. As of December 31, 2024, the Company had $8 million of valuation allowances on the deferred tax benefits related to federal net operating loss carryforwards, $60 million of valuation allowances on the deferred tax benefits related to state net operating loss carryforwards, and $4 million of valuation allowances on the deferred tax benefits related to other credit carryforwards. The Company believes it is more likely than not that the remainder of its deferred tax benefits will be utilized prior to their expiration. Unrecognized Tax Benefits A reconciliation of unrecognized tax benefits is as follows:
|  | Year Ended December 31,
(In millions) |  | 2024 |  | 2023 |  | 2022
Balance at beginning of period |  | $ | 20 |  |  | $ | 13 |  |  | $ | 7 |
Additions for tax positions of current period |  | 3 |  |  | 4 |  |  | 1 |
Additions for tax positions of prior periods |  | — |  |  | 3 |  |  | 5 |
Reductions for tax positions of prior periods |  | (7) |  |  | — |  |  | — |
Balance at end of period |  | $ | 16 |  |  | $ | 20 |  |  | $ | 13 |
During 2024, the Company recorded a $3 million reserve for unrecognized tax benefits related to estimated current year research and development tax credits. In 2024, the Company settled a tax appeal with the state of Pennsylvania related to its method of apportioning income to the state on its 2017 to 2019 returns. As a result of this settlement, the Company recorded a $7 million reduction to its reserve for unrecognized tax benefits related to prior years. As of December 31, 2024, the Company’s overall net reserve for unrecognized tax benefits was $16 million, with a $4 million liability for accrued interest on the uncertain tax positions. If recognized, the net tax benefit of $16 million would not have a material effect on the Company’s effective tax rate. The Company files income tax returns in the U.S. federal, various states and other jurisdictions. The Company is no longer subject to examinations by state authorities before 2012 or by federal authorities before 2018. The Company believes that appropriate provisions have been made for all jurisdictions and all open years, and that any assessment on these filings will not have a material impact on the Company’s financial position, results of operations or cash flows. Recent U.S. Tax Legislation On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law pursuant to the budget reconciliation process. The IRA introduced a new 15 percent corporate alternative minimum tax (“CAMT”), effective for tax years beginning after December 31, 2022, on the adjusted financial statement income (“AFSI”) of corporations with average AFSI exceeding $1 billion over a three-year testing period. The IRA also introduced an excise tax of one percent on the fair market value of certain public company stock repurchases made after December 31, 2022. T he Company became an “applicable corporation” beginning in 2023, but did not owe any additional tax under the CAMT for 2024 and 2023, respectively.

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