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Income Taxes
 12 Months Ended
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):
202420232022
Deferred:
Federal$93 $43 $86 
State28 6 (13)
Foreign(11)(22)— 
Deferred income tax benefit110 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):
202420232022
Income tax benefit at statutory rate$188 $70 $92 
State income tax, net of federal benefit28 7 (13)
Nondeductible expenses(13)(14)(8)
Foreign rate differential1 — (4)
Valuation allowance(108)(49)2 
Unrecognized tax benefit (expense)— — 3 
Research & Development tax credits(1)11 — 
Foreign income tax deduction12 — — 
Other, net(5)(1)3 
Total income tax benefit$102 $24 $75 
The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):
20242023
Deferred tax assets:
Deferred revenue/gains242 220 
Employee benefits106 95 
Foreign tax credit44 90 
Other credits13 15 
Net operating loss carryforward1,082 914 
Interest expense limitation carryforward110 50 
Operating lease liabilities145 161 
Rent expense12 18 
Transaction costs— 25 
Capital loss carryforward125 — 
Sec. 174 research activities34 27 
Other18 16 
Total deferred tax assets1,931 1,631 
Valuation allowance(238)(153)
Deferred tax assets, net1,693 1,478 
Deferred tax liabilities:
Property and equipment(2,168)(2,049)
Operating lease assets(131)(143)
Other(27)(29)
Total deferred tax liabilities(2,326)(2,221)
Net deferred tax liability$(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):
202420232022
Unrecognized tax benefits at January 1,$25 $26 $40 
Increases for tax positions taken during the period8 — 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 recognized, $8 million of the 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 within 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.