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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income tax expense (benefit) recognized in continuing operations are as follows:
| Year Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | (10) |  |  | $ | (3) |  |  | $ | 1 |
Foreign | 214 |  |  | 240 |  |  | 148 |
State and local | 13 |  |  | 12 |  |  | 5 |
Total current | 217 |  |  | 249 |  |  | 154 |
Deferred: |  |  |  |  |
Federal | 326 |  |  | — |  |  | — |
Foreign | 19 |  |  | (13) |  |  | 17 |
State and local | 72 |  |  | — |  |  | — |
Total deferred | 417 |  |  | (13) |  |  | 17 |
Total income tax expense | $ | 634 |  |  | $ | 236 |  |  | $ | 171 |
A reconciliation of U.S. statutory federal tax expense to total income tax expense follows:
| Year Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
U.S. statutory federal tax expense (includes equity method earnings) | $ | 571 |  |  | $ | 66 |  |  | $ | 51 |
Increase (decrease) in taxes resulting from: |  |  |  |  |
State and local income taxes | 66 |  |  | 6 |  |  | — |
Goodwill Impairment | — |  |  | — |  |  | 10 |
Sale of foreign subsidiaries | — |  |  | (10) |  |  | — |
NCI | 13 |  |  | 13 |  |  | 15 |
Foreign tax differential, net | 53 |  |  | 48 |  |  | (106) |
Valuation allowance, net | (97) |  |  | 122 |  |  | 194 |
Other, net | 28 |  |  | (9) |  |  | 7 |
Total income tax expense | $ | 634 |  |  | $ | 236 |  |  | $ | 171 |
Deferred taxes reflect the tax effects of differences between the amounts recorded as assets and liabilities for financial reporting purposes and the amounts recognized for income tax purposes. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
| December 31,
(in millions) | 2024 |  | 2023
Deferred tax assets: |  |  |
Accrued liabilities not currently deductible: |  |  |
Employee compensation and benefits | $ | 98 |  |  | $ | 105 |
Project and non-project reserves | 50 |  |  | 20 |
Revenue recognition | 44 |  |  | 51 |
Net operating loss carryforward | 362 |  |  | 399 |
Tax basis of investment in excess of book basis, net | 135 |  |  | 156 |
U.S. foreign tax credit carryforward | 663 |  |  | 611 |
AOCI | 29 |  |  | 42 |
Other | 92 |  |  | 64 |
Total deferred tax assets | 1,473 |  |  | 1,448 |
Valuation allowance | (1,241) |  |  | (1,340) |
Deferred tax assets, net | $ | 232 |  |  | $ | 108 |
Deferred tax liabilities: |  |  |
Book basis of property and equipment in excess of tax basis | (52) |  |  | (19) |
Book basis of investments in excess of tax basis | (546) |  |  | (33) |
Dividend withholding on unremitted foreign earnings | (59) |  |  | (60) |
Other | (13) |  |  | (15) |
Total deferred tax liabilities | (670) |  |  | (127) |
Deferred tax liabilities, net of deferred tax assets | $ | (438) |  |  | $ | (19) |
As of December 31, 2024, we are indefinitely reinvested only with respect to unremitted earnings required to meet our working capital and long-term investment needs in the foreign jurisdictions where we operate. Beyond those limits, we expect current earnings to be available for distribution. Deferred tax liabilities of approximately $26 million have not been recorded with respect to unremitted earnings that are considered indefinitely reinvested, primarily associated with foreign withholding and income taxes that would be due upon remittance. We have no intention of initiating any actions that would lead to taxation of the earnings deemed indefinitely reinvested. As of December 31, 2024, tax credit carryforwards and tax loss carryforwards are as follows:
(in millions) | Federal FTC |  | State NOLs |  | Foreign NOLs
Expiration periods: |  |  |  |  |
2025-2029 | $ | 266 |  |  | $ | 4 |  |  | $ | 28 |
2030-2034 | 317 |  |  | 117 |  |  | 65 |
2035-2044 | 79 |  |  | 218 |  |  | 2 |
Indefinite | — |  |  | 324 |  |  | 1,207 |
During 2024 and 2023, we were in a 3-year cumulative loss on a jurisdictional basis in the Netherlands and the U.K. Such cumulative loss constitutes significant negative evidence (with regards to future taxable income) for assessing likelihood of realization. We also considered positive evidence but concluded it did not outweigh this significant negative evidence of a 3-year cumulative loss. Accordingly, we recognized non-cash charges to tax benefit of $44 million and tax expense of $30 million against certain net foreign deferred tax assets during 2024 and 2023, respectively. In 2024, the U.S. is no longer in a cumulative loss position and we recognized a $2.2 billion deferred gain from the NuScale deconsolidation and remeasurement. For income tax purposes, we recognized $531 million U.S. net deferred tax liability. Accordingly, $153 million of the valuation allowances were released since we determined certain deferred tax assets can be realized by reduction of taxes payable on taxable income when the deferred NuScale gain will be recognized. However, we maintained the valuation allowance on U.S. federal foreign tax credits, capital loss carryforwards, and certain state net operating loss carryforwards due to our assessment indicating these assets likely will not be realized. In 2023, the U.S. was in a cumulative loss position and we recognized a non-cash charge of $92 million to record a valuation allowance against net U.S. deferred tax assets. In the normal course of business, we are subject to examination by taxing authorities worldwide, including such major jurisdictions as Australia, Canada, Chile, the Netherlands, the United Kingdom, and the United States. Although we believe our reserves for our tax positions are reasonable, the outcome of tax audits could be materially different, both favorably and unfavorably. With a few exceptions, we are no longer subject to U.S. federal, state and local, or foreign income tax examinations for years before 2012. A summary of unrecognized tax benefits follows:
(in millions) | 2024 |  | 2023
Balance at beginning of year | $ | 52 |  |  | $ | 49 |
Change in tax positions of prior years | 15 |  |  | 3 |
Change in tax positions of current year | — |  |  | — |
Reduction in tax positions for statute expirations | (1) |  |  | — |
Reduction in tax positions for audit settlements | (33) |  |  | — |
Balance at end of year | $ | 33 |  |  | $ | 52 |
If recognized, the total amount of unrecognized tax benefits as of December 31, 2024 and 2023, would favorably impact the effective tax rates by $15 million and $36 million, respectively. We had $22 million and $20 million of accrued interest and penalties as of December 31, 2024 and 2023, respectively. We do not anticipate any significant changes to the unrecognized tax benefits within the next twelve months. U.S. and foreign earnings (loss) before taxes are as follows:
| Year Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
United States | $ | 1,589 |  |  | $ | 185 |  |  | $ | (465) |
Foreign | 1,129 |  |  | 130 |  |  | 709 |
Total | $ | 2,718 |  |  | $ | 315 |  |  | $ | 244 |

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