XML 28 R15.htm IDEA: XBRL DOCUMENT v3.22.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Significant components of the provision for income tax benefit (expense) are as follows:
(In thousands)Year Ended December 31,
202220212020
Current – Federal
$(54,934)$(2,169)$(652)
Current – foreign
(4,891)(2,177)(1,674)
Current – state
(19,312)(14,919)1,680 
Total current expense(79,137)(19,265)(646)
Deferred – Federal
65,553 932 172,302 
Deferred – foreign
1,659 976 28 
Deferred – state
7,206 8,966 11,939 
Total deferred benefit74,418 10,874 184,269 
Income tax benefit (expense)$(4,719)$(8,391)$183,623 

The current tax expenses recorded for the years ended December 31, 2022 and 2021 were primarily related to federal, state, and local tax expenses incurred due to taxable income in excess of available net operating losses during those years.
The current tax expense recorded for the year ended December 31, 2020 was primarily related to local country foreign tax expense in certain jurisdictions partially offset by adjustments to the Company’s reserves for unrecognized tax benefits in certain state jurisdictions.
The deferred tax benefits of $74.4 million and $10.9 million recorded in the years ended December 31, 2022 and 2021, respectively, related primarily to the difference of book in excess of tax amortization expense during the years and the disallowance of interest expense deductions under Section 163(j) of the Internal Revenue Code. The 2022 book amortization
expense included the FCC license non-cash impairment charge recorded during the third quarter of 2022 discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill. These benefits were partially offset by the utilization of net operating loss carryforwards during the current period and the recording of valuation allowance adjustments against certain federal and state deferred tax assets for disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future years.
The deferred tax benefit of $184.3 million recorded in the year ended December 31, 2020 related primarily to the current period net operating losses and a reduction in deferred tax liabilities recorded in connection with the impairment of our FCC licenses discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill.
On March 27, 2020, the CARES Act, which included numerous tax provisions, was signed into law. The CARES Act included certain temporary relief provisions with respect to the application of the Section 163(j) interest deduction limitation including the ability to elect to use the Company’s 2019 Adjusted Taxable Income (as defined under Section 163(j)) for purposes of calculating the 2020 interest deduction limitation. This provision of the CARES Act resulted in an increase to allowable interest deductions of $179.4 million during 2020. The other federal income tax provisions within the CARES Act did not materially impact the Company’s financial statements.
On December 27, 2020, the Consolidated Appropriations Act was signed into law in order to provide further stimulus and support to those affected by the COVID-19 pandemic. The tax provisions included within the Consolidated Appropriations Act did not materially impact the Company’s financial statements in the current year.

On August 16, 2022, the Inflation Reduction Act was signed into law. The tax provisions included within the Inflation Reduction Act did not materially impact the Company's financial statements in the current year.

Significant components of the Company's deferred tax liabilities and assets as of December 31, 2022 and 2021 are as follows:
(In thousands)20222021
Deferred tax liabilities:
Intangibles$659,378 $821,449 
Fixed Assets101,934 109,957 
Deferred Income44,261 — 
Operating lease right-of-use assets199,926 187,938 
Total deferred tax liabilities1,005,499 1,119,344 
Deferred tax assets:
Accrued expenses16,665 22,003 
Net operating loss carryforwards141,163 157,095 
Interest expense carryforwards346,354 337,660 
Operating lease liabilities233,003 210,227 
Capital loss carryforwards1,655,534 1,651,413 
Investments10,992 18,956 
Bad debt reserves10,172 13,078 
Other8,997 4,833 
Total gross deferred tax assets2,422,880 2,415,265 
Less: Valuation allowance1,901,191 1,854,143 
Total deferred tax assets521,689 561,122 
Net deferred tax liabilities$483,810 $558,222 

The deferred tax liability related to intangibles primarily relates to the difference in book and tax basis of FCC licenses and other intangible assets that were adjusted for book purposes to estimated fair values as part of the application of fresh start accounting, and were further adjusted in the first quarter of 2020 and the third quarter of 2022 upon recognition of impairments
as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill. In accordance with ASC 350-10, the Company does not amortize FCC licenses for financial reporting purposes. As a result, this deferred tax liability will not reverse over time unless the Company recognizes future impairment charges or sells its FCC licenses. As the Company continues to amortize its tax basis in its FCC licenses, the deferred tax liability will increase over time. The Company’s net foreign deferred tax liabilities for the years ended December 31, 2022 and 2021 were $11.5 million and $13.2 million, respectively.
At December 31, 2022, the Company had recorded net operating loss and tax credit carryforwards (tax effected) for federal and state income tax purposes of approximately $141.2 million, expiring in various amounts through 2042 or in some cases with no expiration date. Internal Revenue Code Section 163(j), as amended, generally limits the deduction for business interest expense to thirty percent of adjusted taxable income (notwithstanding the temporary provisions described above from the enactment of the CARES Act), and provides that any disallowed interest expense may be carried forward indefinitely. The Company recorded deferred tax assets for federal and state interest limitation carryforwards of $346.4 million as of December 31, 2022. In connection with the taxable separation of the Outdoor division as part of the bankruptcy restructuring, the Company realized a $7.2 billion capital loss (gross after attribute reduction calculations). For federal tax purposes the capital loss can be carried forward 5 years and only be used to offset capital gains. For state tax purposes, the capital loss has various carryforward periods. As of December 31, 2022 the tax effected balance of the capital loss carryforwards were $1.7 billion. The Company has recorded a full valuation allowance against the deferred tax asset associated with the federal and state capital loss carryforward as it is not expected to be realized. The Company expects to realize the benefits of a portion of its remaining deferred tax assets based upon expected future taxable income from deferred tax liabilities that reverse in the relevant federal and state jurisdictions and carryforward periods. As of December 31, 2022, the Company had recorded a valuation allowance of $1.9 billion against a portion of these U.S. federal and state deferred tax assets which it does not expect to realize, relating primarily to capital loss carryforwards, disallowed interest carryforwards, and certain state net operating loss carryforwards. The Company's U.S. federal and state deferred tax valuation allowance increased by $47.0 million during the year ended December 31, 2022 primarily due to an increase in valuation allowances against interest limitation carryforwards. Any deferred tax liabilities associated with acquired FCC licenses and tax-deductible goodwill intangible assets are now relied upon as sources of future taxable income for purposes of realizing deferred tax assets attributed to carryforwards that have an indefinite life such as the Section 163(j) interest carryforward.
At December 31, 2022, net deferred tax liabilities include a deferred tax asset of $6.7 million relating to stock-based compensation expense under ASC 718-10, Compensation—Stock Compensation. Full realization of this deferred tax asset requires stock options to be exercised at a price equal to or exceeding the sum of the grant price plus the fair value of the option at the grant date and restricted stock to vest at a price equaling or exceeding the fair market value at the grant date.  Accordingly, there can be no assurance that the stock price of the Company’s common stock will rise to levels sufficient to realize the entire deferred tax benefit currently reflected in its balance sheet.
The reconciliations of income tax on income (loss) computed at the U.S. federal statutory tax rates to the recorded income tax benefit (expense) for the Company are:
Year Ended December 31,
(In thousands)202220212020
AmountPercentAmountPercentAmountPercent
Income tax benefit at statutory rates$54,170 21.0 %$31,500 21.0 %$440,758 21.0 %
State income taxes, net of federal tax effect
(3,548)(1.4)%3,325 2.2 %13,619 0.7 %
Foreign income taxes(1,615)(0.6)%(978)(0.7)%(1,187)(0.1)%
Nondeductible items(7,497)(2.9)%(10,264)(6.8)%(8,928)(0.4)%
Changes in valuation allowance and other estimates
(52,293)(20.3)%(35,093)(23.4)%(30,531)(1.5)%
Impairment charges— — %— — %(257,119)(12.3)%
Tax credits3,848 1.5 %4,831 3.2 %3,353 0.2 %
Other, net2,216 0.9 %(1,712)(1.1)%23,658 1.1 %
Income tax benefit (expense)$(4,719)(1.8)%$(8,391)(5.6)%$183,623 8.7 %

The Company’s effective tax rates for the years ended December 31, 2022 and 2021 were (1.8)% and (5.6)%, respectively. The effective tax rates for both years were primarily impacted the valuation allowance adjustments recorded during the years against certain federal and state deferred tax assets for disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future periods.
The Company’s effective tax rate for the year ended December 31, 2020 was 8.7%. The effective rate for the year was primarily impacted by the impairment charges to non-deductible goodwill discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill. In addition, the Company recorded deferred tax adjustments to state net operating losses and federal and state disallowed interest carryforwards as a result of the filing of 2019 tax returns and certain legal entity restructuring completed during the year. These adjustments were partially offset by valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets such as net operating loss carryforwards and disallowed interest carryforwards due to the uncertainty of the ability to realize those assets in future years.
The Company continues to record interest and penalties related to unrecognized tax benefits in current income tax expense. The total amount of interest accrued at December 31, 2022 and 2021 was $4.9 million and $4.2 million, respectively. The total amount of unrecognized tax benefits including accrued interest and penalties at December 31, 2022 and 2021 was $28.7 million and $22.2 million, respectively, of which $27.2 million and $20.7 million is included in “Other long-term liabilities”. In addition, $1.5 million and $1.5 million of unrecognized tax benefits are recorded net with the Company’s deferred tax assets for its net operating losses as opposed to being recorded in “Other long-term liabilities” at December 31, 2022 and 2021, respectively. The total amount of unrecognized tax benefits at December 31, 2022 and 2021 that, if recognized, would impact the effective income tax rate is $22.9 million and $15.5 million, respectively.
(In thousands)Years Ended December 31,
Unrecognized Tax Benefits20222021
Balance at beginning of period$18,045 $14,681 
Increases for tax position taken in the current year5,584 1,911 
Increases for tax positions taken in previous years1,593 2,937 
Decreases for tax position taken in previous years— (217)
Decreases due to lapse of statute of limitations(1,399)(1,267)
Balance at end of period$23,823 $18,045 
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. All federal income tax matters through 2018 are closed. The majority of all material state, local, and foreign income tax matters have been concluded for years through 2018 with the exception of a current examination in Texas that covers the 2007-2016 tax years.