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Income taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income taxes NOTE 11 — Income taxes
The following table outlines the Company's Loss before income taxes:
Year ended December 31,
In thousands
2024
2023
2022
Domestic
$(128,806)
$(55,073)
$(121,840)
Foreign
51,133
48,908
44,934
Loss before income taxes
$(77,673)
$(6,165)
$(76,906)
The following table outlines the Company's (Benefit) provision for income taxes:
Year ended December 31,
In thousands
2024
2023
2022
Current:
Federal
$(15,979)
$(311)
$(3,579)
State and local
1,780
1,705
804
Foreign
7,671
8,821
1,575
Total current
(6,528)
10,215
(1,200)
Deferred:
Federal
(38,805)
6,436
(692)
State and local
(2,493)
399
(5,868)
Foreign
(3,460)
4,679
9,109
Total deferred
(44,758)
11,514
2,549
(Benefit) provision for income taxes
$(51,286)
$21,729
$1,349
The effective tax rate varies from the federal statutory tax rate as a result of the following differences:
Year ended December 31,
In percentage
2024
2023
2022
Federal statutory tax rate
21.0%
21.0%
21.0%
(Increase) decrease in taxes resulting from:
State and local income taxes, net of federal benefit
(0.5)
3.6
6.0
Debt refinancing
37.8
—
—
Change in valuation allowance
(0.2)
(130.0)
(30.9)
Foreign tax rates differences
(1.0)
(9.2)
0.4
Non-deductible parking
(0.1)
(2.5)
(0.2)
Non-deductible meals, entertainment
(1.0)
(12.8)
(0.9)
(Loss) gain on foreign exchange rate
(0.6)
2.4
0.4
Stock compensation shortfall
(1.2)
(24.2)
(0.2)
Partnership permanent differences
(0.1)
(2.0)
(0.1)
Tegna indemnification release
—
(2.8)
(0.7)
Foreign entities loss adjustments
(1.4)
(1.3)
(1.6)
Newsquest permanent differences
(0.7)
(7.6)
(0.1)
Nondeductible compensation
(1.0)
(13.4)
(2.3)
Provision to return and deferred tax adjustments
5.2
(45.1)
5.4
Global intangible low-taxed income
(10.0)
(112.7)
(4.6)
Branch income
1.2
5.4
1.2
Profit on non-qualifying land and buildings
0.2
0.2
0.1
Uncertain tax positions
19.0
(134.5)
(2.6)
Deduction for interest expense
—
102.7
8.5
Impact of non-deductible goodwill
(0.5)
—
—
Other expenses
(0.1)
10.3
(0.6)
Effective tax rate
66.0%
NM
(1.8)%
NM indicates not meaningful.
Our effective tax rate for the year ended December 31, 2024 was 66.0%. The tax benefit for 2024 was primarily impacted by
the release of uncertain tax position reserves related to an IRS audit, the release of foreign valuation allowances, debt
refinancing transactions and the pre-tax book loss, partially offset by the increase in valuation allowances on non-deductible
U.S. interest expense carryforwards and the global intangible low-taxed income inclusion.
Our effective tax rate for the year ended December 31, 2023 was not meaningful. The tax provision for 2023 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion, the release of uncertain tax positions in the U.S., and the reduction in the blended state tax rate, which were
offset by the tax benefit of the pre-tax book loss.
The tax effects of each type of temporary differences and carryforwards that give rise to significant portions of our deferred
tax assets and deferred tax liabilities are presented below:
December 31,
In thousands
2024
2023
Deferred tax assets:
Fixed assets
$4,474
$—
Accrued compensation costs
13,167
12,900
Accrued liabilities
17,787
14,676
Disallowed interest
121,110
115,030
Goodwill
162
3,200
Capitalized research and development costs
11,572
9,743
Partnership investments
4,961
4,231
Loss carryforwards
203,602
224,505
Lease liabilities
50,826
58,828
Other
15,130
17,257
Total deferred tax assets
$442,791
$460,370
Less: Valuation allowances
(304,673)
(312,038)
Total net deferred tax assets
$138,118
$148,332
Deferred tax liabilities:
Fixed assets
$—
$(5,565)
Right of use asset
(43,157)
(60,384)
Convertible debt
(22,472)
(18,441)
Pension and other postretirement benefit obligations
(9,380)
(8,388)
Definite and indefinite lived intangible assets
(7,054)
(20,457)
Total deferred tax liabilities
$(82,063)
$(113,235)
Net deferred tax assets
$56,055
$35,097
In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. During the
year ended December 31, 2024, the Company recorded a reduction of $7.4 million of valuation allowances against its deferred
tax assets. The decrease in the valuation allowance was primarily due to a decrease of $10.9 million related to foreign valuation
allowances and various other decreases in the valuation allowance of $3.2 million, partially offset by an increase in the U.S.
disallowed interest expense carryforward of $6.1 million and an increase related to currency translation adjustments of
$0.6 million. The Company considered the available evidence, both positive and negative, to determine whether, based on the
weight of that evidence, a valuation allowance for deferred tax assets was needed. The Company reached the conclusion it was
appropriate to record a valuation allowance against a portion of its federal deferred tax assets based on available evidence. We
relied on evidence shown by reversing taxable temporary differences, as well as expectations of future taxable income with the
appropriate tax character.
During the year ended December 31, 2023, the Company recorded an additional $12.0 million of valuation allowances
against its deferred tax assets. The increase in the valuation allowance is primarily due to increases in the U.S. disallowed
interest expense carryforward, decreases in foreign valuation allowances, and increases related to currency translation
adjustment. The Company continues to maintain its existing valuation allowance against net deferred tax assets in many of its
state and foreign jurisdictions as it is not believed to be more likely than not that its deferred tax assets will be realized in such
jurisdictions.
The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended
December 31, 2024 (In thousands):
Balance at
beginning of period
Additions/
(reductions)
charged to expenses
Additions/
(reductions) for
acquisitions/
dispositions
Other additions to
(deductions from)
reserves
Foreign currency
translation
Balance at end of
period
$312,037
$(7,985)
$—
$—
$620
$304,672
The aforementioned valuation allowance relates to indefinite-lived intangible assets, nondeductible interest expense
carryforwards, capital losses, state and foreign net operating losses and other tax attributes.
As of December 31, 2024, the Company had $396.2 million of Federal net operating loss ("NOL") carryforwards, $500.9
million of Federal disallowed business interest expense carryforwards, $1.058 billion of apportioned state NOL carryforwards
and $184.7 million of foreign net NOL carryforwards. Additionally, as of December 31, 2024, the Company had $6.2 million of
other business tax credits, $0.2 million of foreign tax credits, $4.7 million of state credits and $43.2 million of foreign capital
loss carryforwards. The Federal NOL carryforwards begin to expire in 2033, and the state NOL carryforwards began to expire
in 2024. The foreign NOLs begin to expire in 2030. The tax credits began to expire in 2024. A portion of the NOLs are subject
to the limitations of the Internal Revenue Code Section 382. This section provides limitations on the availability of NOL
carryforwards to offset income if a corporation undergoes an "ownership change," generally defined as a greater than 50%
change in equity ownership over a three-year period. The most recent analysis of our historical ownership change was
completed through December 31, 2024. Based on the analysis, we do not anticipate a current limitation on tax attributes.
The following table summarizes the activity related to unrecognized tax benefits, excluding the federal tax benefit of state
tax deductions:
Year ended December 31,
In thousands
2024
2023
2022
Change in unrecognized tax benefits:
Balance at beginning of year
$52,821
$43,697
$46,082
Additions based on tax positions related to the current year
837
7,017
5,411
Additions for tax positions of prior years
8
1,327
—
Reductions for tax positions of prior years
(11,261)
(652)
(2,664)
Reductions due to lapsed statutes of limitations
(137)
(208)
(2,264)
Foreign currency translation
(541)
1,640
(2,868)
Balance at end of year
$41,727
$52,821
$43,697
At December 31, 2024, the Company's uncertain tax positions of $41.7 million, if recognized, would impact the effective
tax rate. During the year ended December 31, 2024, the Company released $11.3 million of the uncertain tax position reserves
and $4.8 million of interest and penalties related to an IRS audit in the second quarter of 2024. The Company recognizes
interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2024 and
2023, the amount of accrued interest and penalties payable related to uncertain tax positions was $0.1 million and $4.6 million,
respectively.
The Company files a federal consolidated income tax return for which the statute of limitations remains open for any year
in which a net operating loss is utilized, which for the Company is the 2011 tax year and subsequent years. U.S. state
jurisdictions have statute of limitations generally ranging from 3 to 6 years. On November 19, 2019, New Media Investment
Group Inc. ("New Media") completed its acquisition of Gannett Co., Inc. (which was renamed Gannett Media Corp. and is
referred to as "Legacy Gannett"). During the second quarter of 2024, the Company closed the federal income tax return audit
for calendar years 2015-2017 for Legacy Gannett. The U.K. income tax returns for calendar years 2018-2021 for Newsquest
Capital Ltd. are under audit. The statute of limitations for the Company's U.K. income tax return remains open for tax years for
2023 and forward.