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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our income tax benefit (expense) consisted of the following for the years ended December 31 (in millions):
|  | 2024 |  | 2023 |  | 2022
Deferred: |  |  |  |  |  |
Federal |  | $ | 93 |  |  | $ | 43 |  |  | $ | 86 |
State |  | 28 |  |  | 6 |  |  | (13) |
Foreign |  | (11) |  |  | (22) |  |  | — |
Deferred income tax benefit |  | 110 |  |  | 27 |  |  | 73 |
Current: |  |  |  |  |  |
Federal |  | — |  |  | 1 |  |  | 3 |
State |  | — |  |  | 1 |  |  | — |
Foreign |  | (8) |  |  | (5) |  |  | (1) |
Current income tax benefit (expense) |  | (8) |  |  | (3) |  |  | 2 |
Total income tax benefit |  | $ | 102 |  |  | $ | 24 |  |  | $ | 75 |
On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act permits net operating loss ("NOL") carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. As of December 31, 2024, the Company has filed an application for refund. Our income tax benefit reconciles to the amount computed below by applying the U.S. federal statutory income tax rate to our loss before income taxes for the years ended December 31 as follows (in millions):
|  | 2024 |  | 2023 |  | 2022
Income tax benefit at statutory rate |  | $ | 188 |  |  | $ | 70 |  |  | $ | 92 |
State income tax, net of federal benefit |  | 28 |  |  | 7 |  |  | (13) |
Nondeductible expenses |  | (13) |  |  | (14) |  |  | (8) |
Foreign rate differential |  | 1 |  |  | — |  |  | (4) |
Valuation allowance |  | (108) |  |  | (49) |  |  | 2 |
Unrecognized tax benefit (expense) |  | — |  |  | — |  |  | 3 |
Research & Development tax credits |  | (1) |  |  | 11 |  |  | — |
Foreign income tax deduction |  | 12 |  |  | — |  |  | — |
Other, net |  | (5) |  |  | (1) |  |  | 3 |
Total income tax benefit |  | $ | 102 |  |  | $ | 24 |  |  | $ | 75 |
The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):
|  | 2024 |  | 2023
Deferred tax assets: |  |  |  |
Deferred revenue/gains |  | 242 |  |  | 220 |
Employee benefits |  | 106 |  |  | 95 |
Foreign tax credit |  | 44 |  |  | 90 |
Other credits |  | 13 |  |  | 15 |
Net operating loss carryforward |  | 1,082 |  |  | 914 |
Interest expense limitation carryforward |  | 110 |  |  | 50 |
Operating lease liabilities |  | 145 |  |  | 161 |
Rent expense |  | 12 |  |  | 18 |
Transaction costs |  | — |  |  | 25 |
Capital loss carryforward |  | 125 |  |  | — |
Sec. 174 research activities |  | 34 |  |  | 27 |
Other |  | 18 |  |  | 16 |
Total deferred tax assets |  | 1,931 |  |  | 1,631 |
Valuation allowance |  | (238) |  |  | (153) |
Deferred tax assets, net |  | 1,693 |  |  | 1,478 |
Deferred tax liabilities: |  |  |  |
Property and equipment |  | (2,168) |  |  | (2,049) |
Operating lease assets |  | (131) |  |  | (143) |
Other |  | (27) |  |  | (29) |
Total deferred tax liabilities |  | (2,326) |  |  | (2,221) |
Net deferred tax liability |  | $ | (633) |  |  | $ | (743) |
As of December 31, 2024, we have a total tax effected NOL carryforwards of $1.1 billion. The federal NOLs of $811 million have an indefinite life. We also have state and foreign NOLs of $139 million and $132 million, respectively from various taxing jurisdictions which, if go unused will start to expire in 2025 through 2044. Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods. In evaluating the realizability of the deferred tax assets, we assess whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. We consider, among other things, the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. At December 31, 2024, we provided a $238 million valuation allowance to reduce the deferred tax assets to an amount that we consider is more likely than not to be realized. Of the total valuation allowance, $114 million relates to foreign NOL carryforward that begins to expire in 2025 and $123 million relates to transaction costs. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
|  | 2024 |  | 2023 |  | 2022
Unrecognized tax benefits at January 1, |  | $ | 25 |  |  | $ | 26 |  |  | $ | 40 |
Increases for tax positions taken during the period |  | 8 |  |  | — |  |  | 5 |
Decreases for tax positions taken during the period |  | (1) |  |  | (5) |  |  | (6) |
Increases for tax positions taken during a prior period |  | — |  |  | 5 |  |  | — |
Decreases for tax positions taken during a prior period |  | (1) |  |  | (1) |  |  | (13) |
Unrecognized tax benefits December 31, |  | $ | 31 |  |  | $ | 25 |  |  | $ | 26 |
Interest and penalties accrued on unrecognized tax benefits were not significant. If recogniz ed, $8 million of th e unrecognized tax benefits as of December 31, 2024 would impact our effective tax rate. We do not expect any significant change in the amount of the unrecognized tax benefits wit hin the next 12 months. As a result of net operating losses and statute of limitations in our major tax jurisdictions, years 2016 through 2020 remain subject to examination by the relevant tax authorities.

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