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INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 11 - INCOME TAXES
Income from continuing operations before income taxes includes the following components:
Year Ended December 31,
(In millions)202320222021
United States$600 $1,803 $3,827 
Foreign(3)(7)(24)
Total $597 $1,796 $3,803 
The components of the income tax expense from continuing operations consist of the following:
Year Ended December 31,
(In millions)202320222021
Current provision:
United States federal$4 $201 $14 
United States state & local26 131 55 
Foreign4 1 — 
34 333 69 
Deferred provision (benefit):
United States federal97 117 683 
United States state & local7 (22)31 
  Foreign10 (5)(10)
Total income tax expense from continuing operations$148 $423 $773 
Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate is as follows:
(In millions)202320222021
Tax at U.S. statutory rate $125 21 %$377 21 %$799 21 %
Increase (decrease) due to:
Percentage depletion in excess of cost depletion(32)(5)(49)(3)(99)(3)
Valuation allowance14 2 — — — — 
Unrecognized tax benefits7 1 2 — 9 — 
State taxes, net28 5 71 4 86 2 
Federal & state provision to return(20)(3)27 1 (2)— 
Income not subject to tax(11)(2)(9)— (9)— 
Goodwill impairment26 4 — — — — 
Other items, net11 2 4 — (11)— 
Provision for income tax expense and effective income tax rate including discrete items$148 25 %$423 23 %$773 20 %
The decreases in income tax expense in 2023, as compared to 2022, as well as 2022 compared to 2021 are predominately related to the decrease in the pre-tax book income year-over-year.
The components of income taxes for other than continuing operations consisted of the following:
(In millions)202320222021
Other comprehensive income (loss):
Pension and OPEB$10 $(425)$(206)
Derivative financial instruments47 26 (21)
Total$57 $(399)$(227)
Significant components of our deferred tax assets and liabilities are as follows:
(In millions)20232022
Deferred tax assets:
Operating loss and other carryforwards$390 $389 
Pension and OPEB liabilities155 244 
Environmental67 96 
Product inventories92 54 
State and local9 14 
Lease liabilities79 62 
Other liabilities180 135 
Total deferred tax assets before valuation allowance972 994 
Deferred tax asset valuation allowance(396)(390)
Net deferred tax assets576 604 
Deferred tax liabilities:
Investment in ventures(192)(195)
Lease assets(79)(38)
Property, plant and equipment and mineral rights(837)(827)
Other assets(103)(122)
Total deferred tax liabilities(1,211)(1,182)
Net deferred tax assets (liabilities)$(635)$(578)
We had gross domestic (including states) and foreign NOLs of $1,704 million and $1,452 million, respectively, at December 31, 2023. We had gross domestic (including states) and foreign NOLs of $2,278 million and $1,444 million, respectively, at December 31, 2022. The U.S. federal NOLs will begin to expire in 2034 and state NOLs begin to expire in 2024. The foreign NOLs begin to expire in 2035. For the year ended December 31, 2023, we had no gross interest expense limitation carryforwards. For the year ended December 31, 2022, we had $77 million gross interest expense limitation carryforwards.
The changes in the valuation allowance are presented below:
(In millions)202320222021
Balance at beginning of year$390 $409 $836 
Change in valuation allowance:
Included in income tax expense6 (19)(82)
Decrease from acquisitions— — (345)
Balance at end of year$396 $390 $409 
At December 31, 2023 and 2022, we have a valuation allowance recorded of $356 million and $342 million, respectively, related to foreign deferred tax assets, and an additional $40 million and $48 million, respectively, against certain state NOLs, which are expected to expire before utilization.
During 2023, we recorded a $14 million valuation allowance against a portion of our Canadian deferred tax assets due to losses in recent years. We intend to maintain a valuation allowance against these deferred tax assets, unless and until sufficient positive evidence exists to support the realization of such assets.
During 2021, we recorded a decrease to the valuation allowance of $345 million related to the election filed with our 2020 federal tax return to waive the pre-acquisition NOLs that are limited under Section 382 of the IRC. An offsetting decrease was recorded in the NOL deferred tax asset in the same period.
Our losses in Luxembourg in recent periods represent sufficient negative evidence to require a full valuation allowance against the deferred tax assets in that jurisdiction. We intend to maintain a valuation allowance against the deferred tax assets related to these operating losses, unless and until sufficient positive evidence exists to support the realization of such assets.
At December 31, 2023 and 2022, we had no cumulative undistributed earnings of foreign subsidiaries included in retained earnings. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of earnings.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(In millions)202320222021
Unrecognized tax benefits balance as of January 1$58 $35 $107 
Increases for tax positions in current year18 24 4 
Decrease due to tax positions in prior year— (1)(66)
Lapses in statutes of limitations— — (10)
Unrecognized tax benefits balance as of December 31$76 $58 $35 
At December 31, 2023 and 2022, we had unrecognized tax benefits of $76 million and $58 million, respectively, included in Other non-current liabilities on the Statements of Consolidated Financial Position. If the unrecognized tax benefits were recognized, the full $76 million would impact the effective tax rate. Interest and penalties related to unrecognized tax benefits are $8 million for the year ended December 31, 2023. We do not expect that the amount of unrecognized benefits will change significantly within the next 12 months.
Tax years 2016 and forward remain subject to examination for the U.S., and tax years 2018 and forward remain subject to examination for Canada.