A net operating loss (NOL) happens when a company incurs a tax loss in some given year. The NOL can then be carried forward to reduce taxable income in future years, which makes NOLs a nifty thing to keep on the books. As the Morgan Stanley research note observed, the potential cash tax savings offer “a real and significant economic value” to a company or acquiring business.

OK, sounds cool — so which companies have NOLs on the books? 

That was the question Morgan Stanley explored, using data from Calcbench and other less-cool sources. Research analyst Todd Castagno found that U.S. companies had roughly $510 billion of NOLs at the end of 2023. The NOLs were concentrated in healthcare (18 percent), financials (13 percent), technology (13 percent), energy (13 percent), and industrials (13 percent), with several other industries following behind. 

The pie chart shows the complete breakdown.

If a company has an NOL, it discloses that fact in the footnotes of the annual report in the tax disclosure. For example, we used our Interactive Disclosure tool to dig up the NOL information for Delta Air Lines ($DAL). See below:

NOLs can be quite useful as companies try to manage their tax burden, although how useful they are depends on tax law. For example, the tax cuts of 2017 limited the total size of possible deductions, disallowed carrybacks, and lifted limits on carryforwards. The pandemic relief bills of 2020 then allowed some carrybacks for a limited period, and today the treatment of NOLs depends on when the loss was generated. 

If you want more information on those details, read Castagno’s note or, better yet, consult a tax attorney. On the other hand, if you simply want to research who has what NOLs on their books and how large those NOLs are, Calcbench is here for you; we even have an analysis guide for tax disclosures. 

If you ever need help, email us at info@calcbench.com. Good luck with the research!