Company: EXEEZ
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000895126-25-000021
Chunk: 135

Company: EXPAND ENERGY Corp
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 135
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$933 Deferred income tax liabilities(10)— Total$579 $933 As of December 31, 2024 and 2023, we had deferred tax assets of $2.691 billion and $1.735 billion, respectively, upon which we had a valuation allowance of $343 million and $312 million, respectively. The net change in the valuation allowance of $31 million is primarily due to the additional valuation allowance recorded related to the acquisition of Southwestern tax attributes partially offset by the expiration of a capital loss carryforward and state net operating loss carryforwards. Of this $31 million net change in the valuation allowance, $35 million is reflected in components of stockholders’ equity which is partially offset by $4 million reflected as a component of income tax benefit in the consolidated statements of operations.We maintain a partial valuation allowance of $343 million against a portion of our federal and state deferred tax assets such as NOLs, credit carryovers, and capital losses, which may expire before we are able to utilize them due to the application of the limitations under Section 382 and the ordering in which such attributes may be applied.Our ability to utilize NOL carryforwards, disallowed business interest carryforwards, tax credits and possibly other tax attributes to reduce future taxable income and federal income tax is subject to various limitations under Section 382 of the Code. The utilization of such attributes may be subject to an annual limitation under Section 382 of the Code should transactions involving our equity result in a cumulative shift of more than 50% in the beneficial ownership of our stock during any three-year testing period (an “Ownership Change”). 

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TABLE OF CONTENTSEXPAND ENERGY CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company experienced an Ownership Change in 2021 (“First Ownership Change”). The amount of the annual limitation due to the First Ownership Change is $54 million. This limitation applies to our NOL carryforwards, disallowed business interest carryforwards and general business tax credits that existed at the time of the First Ownership Change until such attributes expire or are fully utilized. As a result of the Southwestern Merger on October 1, 2024, the Company experienced another Ownership Change (“Second Ownership Change”). The base amount of the annual limitation due to the Second Ownership Change has been estimated to be $380 million. This limitation applies to our NOL carryforwards