INCOME TAXES

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8: INCOME TAXES

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except percentages)	2023			2024			2023			2024
Income (loss) before income taxes	$	22		$	191		$	(487)		$	353
Provision for (benefit from) income taxes	(3)			3			(1)			8
Effective tax rate	(15.7)		%	1.8		%	0.2		%	2.4		%

Our tax provision for interim periods is determined using an estimated annual effective tax rate (“ETR”), adjusted for discrete items arising in the period. In each quarter, we update our estimated annual ETR and make a year-to-date calculation of the provision.

For the three and six months ended June 30, 2023 and June 30, 2024, the ETR was lower than the U.S. federal statutory rate primarily due to the full valuation allowance on our U.S. federal and state deferred tax assets offset by current taxes payable.

The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available objective evidence during the six months ended June 30, 2024, we believe it is more likely than not that the tax benefits of the remaining U.S. federal, state, and certain foreign net

deferred tax assets may not be realized until sufficient positive evidence exists to support reversal of the valuation allowance.

Utilization of the net operating loss and credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and tax credits before utilization.

In June 2024, California's Governor signed Senate Bill 167 (“SB 167”), which temporarily suspends the use of California net operating losses and imposes a cap on business incentive tax credits that we can utilize against our income taxes, and Senate Bill 175 (“SB 175”), allows for the recovery of suspended credits. We believe the recent tax legislation changes provided under SB 167 and SB 175 do not materially impact our income tax provision and do not change our evaluation of the valuation allowance against deferred tax assets in California as of June 30, 2024.