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Note 10 - Income Taxes | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
10. | Income Taxes
We recognize deferred tax assets and liabilities for future tax consequences attributable to differences between our financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. We recognize the effect on deferred tax assets and liabilities resulting from a change in tax rates in income in the period that includes the date of the change. Under certain circumstances, we recognize liabilities in our financial statements for positions taken on uncertain tax issues. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others may be subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, we believe it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits on the balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax benefits are classified as income tax expense in the statement of operations. Federal and state and local income tax expense is summarized as follows (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 73 |  |  | $ | 148 |  |  | $ | 74 |
State and local |  |  | 12 |  |  |  | 31 |  |  |  | 26 |
Current income tax expense |  |  | 85 |  |  |  | 179 |  |  |  | 100 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (76 | ) |  |  | (21 | ) |  |  | (12 | )
State and local |  |  | (15 | ) |  |  | 1 |  |  |  | (10 | )
Deferred income tax benefit |  |  | (91 | ) |  |  | (20 | ) |  |  | (22 | )
Total income tax (benefit) expense |  | $ | (6 | ) |  | $ | 159 |  |  | $ | 78 |
Significant components of our deferred tax liabilities and assets are as follows (in millions):
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Net book value of property and equipment |  | $ | 149 |  |  | $ | 143 |
Broadcast licenses, goodwill and other intangible assets |  |  | 1,338 |  |  |  | 1,363 |
Other |  |  | 3 |  |  |  | 5 |
Total deferred tax liabilities |  |  | 1,490 |  |  |  | 1,511 |
Deferred tax assets: |  |  |  |  |  |  |  |
Liability for accrued bonus |  |  | 13 |  |  |  | 11 |
State and local operating loss carryforwards |  |  | 7 |  |  |  | 10 |
Interest expense limitation |  |  | 88 |  |  |  | 17 |
Other |  |  | 32 |  |  |  | 29 |
Total deferred tax assets |  |  | 140 |  |  |  | 67 |
Valuation allowance for deferred tax assets |  |  | (9 | ) |  |  | (10 | )
Net deferred tax assets |  |  | 131 |  |  |  | 57 |
Deferred tax liabilities, net of deferred tax assets |  | $ | 1,359 |  |  | $ | 1,454 |
As of December 31, 2023, we have an aggregate of approximately $299 million of various state operating loss carryforwards, of which we expect that approximately one-third will be utilized. We expect that the unutilized portion of these state net operating loss carryforwards will not be utilized due to section 382 limitations and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets. A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the consolidated financial statements for the years ended December 31, 2023, 2022 and 2021 is as follows (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Statutory federal rate applied to income before income tax expense |  | $ | (17 | ) |  | $ | 129 |  |  | $ | 35 |
Current year permanent items |  |  | 11 |  |  |  | 5 |  |  |  | 33 |
State and local taxes, net of federal tax benefit |  |  | (4 | ) |  |  | 26 |  |  |  | 10 |
Change in valuation allowance |  |  | (1 | ) |  |  | - |  |  |  | - |
Other items, net |  |  | 5 |  |  |  | (1 | ) |  |  | - |
Income tax (benefit) expense as recorded |  | $ | (6 | ) |  | $ | 159 |  |  | $ | 78 |
Effective income tax rate |  |  | 7 | % |  |  | 26 | % |  |  | 46 | %
Each year-end, we adjust our other comprehensive income on a net of tax basis. During 2023, we increased our recorded non-current pension asset by $7 million; we recorded an adjustment of the fair value of our interest rate caps of $23 million; and together, we recorded a $5 million tax benefit. During 2022, we decreased our recorded non-current pension liability by $20 million and recognized other comprehensive income of $15 million, net of a $5 million tax provision. During 2021, we decreased our recorded non-current pension liability by $16 million and recognized other comprehensive loss of $12 million, net of a $4 million tax benefit. Beginning in 2023, on a quarterly basis, we adjust the net liability related to our interest rate caps to their fair value, with a corresponding adjustment to other comprehensive income on a net of tax basis. During 2023, we increased our recorded non-current interest rate cap liability by $23 million and recognized other comprehensive losses of $17 million, net of a $6 million tax benefit. We made income tax payments (net of refunds) of $50 million, $180 million and $149 million during the years ended December 31, 2023, 2022 and 2021, respectively. We prescribe a recognition threshold and measurement attribution for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. As of December 31, 2023, we had approximately $14 million of unrecognized tax benefits. All these unrecognized tax benefits would impact our effective tax rate if recognized. The liability for unrecognized tax benefits is recorded net of any federal tax benefit that would result from payment. We file a federal consolidated income tax return in the United States and state or local consolidated income tax returns in various state or local jurisdictions. Certain of our subsidiaries file separate tax returns in other various state and local jurisdictions. With few exceptions, we are no longer subject to federal, state and local tax examinations by tax authorities for years before 2003. The following table summarizes the activity related to our reserve for uncertain tax positions (in millions):
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Balance at beginning of period |  | $ | 15 |  |  | $ | 15 |  |  | $ | 14 |
Additions based on tax positions related to prior years |  |  | - |  |  |  | - |  |  |  | 3 |
Statute expirations |  |  | (1 | ) |  |  | - |  |  |  | (2 | )
Balance at end of period |  | $ | 14 |  |  | $ | 15 |  |  | $ | 15 |
If our reserve for unrecognized tax positions, as presented above, were to be recognized, there would be a favorable impact on the company’s reported income tax expenses in the period recognized. We recognize accrued interest and penalties related to uncertain tax positions in income tax expense in the accompanying Consolidated Statements of Operations and Consolidated Statements of Comprehensive (Loss) Income. During the years ended December 31, 2023, 2022 and 2021, our penalty and interest expense related to uncertain tax positions was not material. At December 31, 2023, 2022 and 2021, the total accrual for interest and penalties related to uncertain tax positions was not material. On March 27, 2020, the CARES Act was enacted in response to the COVID-19 global pandemic. The CARES Act, among other things, contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020, and permits net operating loss carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows net operating losses (“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. During 2020, we carried back certain NOLs resulting in a refund, excluding interest, of $21 million, which is currently outstanding.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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