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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Taxes [Abstract] |
Income Taxes | (14) Income Taxes: The following is a reconciliation of the provision for income taxes computed at the federal statutory rate to income taxes computed at the effective rates:
|  |  | For the year ended |  | For the year ended |  | For the year ended |
|  |  | ended December 31, |  | December 31, |  | December 31, |
|  |  | 2024 |  | 2023 |  | 2022 |
| Consolidated tax provision at federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | % |
| State income tax provisions, net of federal income tax benefit |  | (10.5) |  |  | 13.7 |  |  | 4.8 |  |
| Tax reserve adjustment |  | - |  |  | - |  |  | 0.6 |  |
| Changes in certain deferred tax balances |  | 0.4 |  |  | 23.4 |  |  | (0.5) |  |
| Nondeductible transaction costs |  | (1.5) |  |  | - |  |  | - |  |
| Nondeductible Executive Compensation under Sec. 162(m) |  | (2.6) |  |  | 12.2 |  |  | 2.0 |  |
| Sec. 162(f) nondeductible penalties |  | (0.3) |  |  | 3.1 |  |  | 0.3 |  |
| All other, net |  | 0.5 |  |  | 1.9 |  |  | (1.8) |  |
| Effective tax rate |  | 7.0 | % |  | 75.3 | % |  | 26.4 | % |
Other Tax Items In 2024, we had net federal and state income tax refunds totaling $10 million. In 2023, we paid net zero federal and state income tax. In 2022, we paid net federal and state income tax totaling $8 million. The components of the net deferred income tax liability (asset) are as follows:
|  |  |  | December 31, |  |  | December 31, |
| ($ in millions) |  |  | 2024 |  |  | 2023 |
| Deferred income tax liabilities: |  |  |  |  |  |  |
| Property, plant, and equipment basis differences |  | $ | 1,753 |  | $ | 1,342 |
| Intangibles |  |  | 94 |  |  | 184 |
| Deferred revenue/expense |  |  | (7) |  |  | (8) |
| Other, net |  |  | 48 |  |  | 45 |
|  |  | $ | 1,888 |  | $ | 1,563 |
| Deferred income tax assets: |  |  |  |  |  |  |
| Pension liability |  | $ | 26 |  | $ | 48 |
| Tax operating loss carryforward |  |  | 705 |  |  | 476 |
| Employee benefits |  |  | 75 |  |  | 83 |
| Interest expense deduction |  |  |  |  |  |  |
| limitation carryforward |  |  | 468 |  |  | 260 |
| Accrued expenses |  |  | 84 |  |  | 80 |
| Lease obligations |  |  | 131 |  |  | 111 |
| Tax credit |  |  | 45 |  |  | 32 |
| Allowance for doubtful accounts |  |  | 16 |  |  | 11 |
| Other, net |  |  | (28) |  |  | (1) |
|  |  |  | 1,522 |  |  | 1,100 |
| Less: Valuation allowance |  |  | (243) |  |  | (180) |
| Net deferred income tax asset |  |  | 1,279 |  |  | 920 |
| Net deferred income tax liability |  | $ | 609 |  | $ | 643 |
Our federal net operating loss carryforward as of December 31, 2024, is estimated at $2.1 billion gross (tax effected $443 million). Some of the federal loss carryforward will begin to expire between 2036 and 2037, with $1,768 million gross (tax effected $371 million) carrying forward indefinitely, unless otherwise used. Our state tax operating loss carryforward as of December 31, 2024, is estimated at $4.4 billion. A portion of our state loss carryforward will continue to expire annually through 2042, unless otherwise used. Our federal research and development credit as of December 31, 2024, is estimated at $14 million. The federal research and development credit will begin to expire after 2041, unless otherwise used. Our various state credits as of December 31, 2024, are estimated at $48 million. The state credits will begin to expire after 2024, unless otherwise used. We considered positive and negative evidence in regard to evaluating certain deferred tax assets during 2024, including the development of recent years of pre-tax book losses. On the basis of this evaluation, a valuation allowance of $308 million tax effected ($243 million net of federal benefit) was recorded as of December 31, 2024. This valuation allowance is related to state net operating losses, state tax credits, and the state impact from the federal limitation on interest expense deduction. In evaluating our ability to realize our deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management also considered the projected reversal of deferred tax liabilities in making this assessment. Based upon this assessment, management believes it is more likely than not we will realize the benefits of these deductible differences, net of valuation allowance. The provision (benefit) for federal and state income taxes, as well as the taxes charged or credited to equity of Frontier, includes amounts both payable currently and deferred for payment in future periods as indicated below:
|  | For the year ended |  | For the year ended |  | For the year ended |
|  | December 31, |  | December 31, |  | December 31, |
| ($ in millions) | 2024 |  | 2023 |  | 2022 |
| Income tax expense (benefit): |  |  |  |  |  |  |  |  |
| Current: |  |  |  |  |  |  |  |  |
| Federal | $ | - |  | $ | - |  | $ | - |
| State |  | 4 |  |  | 10 |  |  | (7) |
| Total Current |  | 4 |  |  | 10 |  |  | (7) |
| Deferred: |  |  |  |  |  |  |  |  |
| Federal |  | (69) |  |  | 58 |  |  | 125 |
| State |  | 41 |  |  | 20 |  |  | 40 |
| Total Deferred |  | (28) |  |  | 78 |  |  | 165 |
| Total income tax expense (benefit) |  | (24) |  |  | 88 |  |  | 158 |
| Income taxes charged (credited) to equity of Frontier: |  |  |  |  |  |  |  |  |
| Deferred income taxes (benefits) arising from the recognition of additional pension/OPEB liability |  | (6) |  |  | 6 |  |  | 8 |
| Total income taxes charged (credited) to equity of Frontier |  | - |  |  | - |  |  | - |
| Total income tax expense (benefit) | $ | (30) |  | $ | 94 |  | $ | 166 |
U.S. GAAP requires applying a “more likely than not” threshold to the recognition and derecognition of uncertain tax positions either taken or expected to be taken in our income tax returns. The total amount of our gross tax liability for tax positions that may not be sustained under a “more likely than not” threshold amounts to $7 million as of December 31, 2024, including immaterial interest. The amount of our uncertain tax positions, for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease during the next twelve months, would not have a material impact on our effective tax rate as of December 31, 2024. Our policy regarding the classification of interest and penalties is to include these amounts as a component of income tax expense. This treatment of interest and penalties is consistent with prior periods. We are subject to income tax examinations generally for the years 2019 forward for federal and 2016 forward for state filing jurisdictions. We also maintain uncertain tax positions in various state jurisdictions. The following table sets forth the changes in our balance of unrecognized tax benefits:
| ($ in millions) |  | December 31, |  | December 31, |  | December 31,
|  |  | 2024 |  | 2023 |  | 2022
| Unrecognized tax benefits - beginning of period |  | $ | 5 |  | $ | 5 |  | $ | 1
| Gross decreases - prior period tax positions |  |  | - |  |  | (1) |  |  | -
| Gross increases (decrease) - current period tax positions |  |  | 2 |  |  | 1 |  |  | 4
| Unrecognized tax benefits - end of period |  | $ | 7 |  | $ | 5 |  | $ | 5

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