Clear Channel Outdoor Holdings, Inc.CCO
Clear Channel Outdoor Holdings, Inc. Income Taxes Disclosure
INCOME TAXES
Components of Income Tax Benefit (Expense) Attributable to Continuing Operations
The Company’s income tax benefit (expense) attributable to continuing operations for 2025, 2024 and 2023 consisted of the following components:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current - federal | $ | (972) | $ | (516) | $ | (4,356) | |||||||||||
| Current - state | (1,866) | (2,565) | (439) | ||||||||||||||
| Current - foreign | 756 | (197) | (403) | ||||||||||||||
| Total current income tax expense attributable to continuing operations | (2,082) | (3,278) | (5,198) | ||||||||||||||
| Deferred - federal | 2,292 | 15,081 | 23,120 | ||||||||||||||
| Deferred - state | (5,709) | (3,410) | 6,200 | ||||||||||||||
| Deferred - foreign | 552 | 972 | (443) | ||||||||||||||
| Total deferred income tax benefit (expense) attributable to continuing operations | (2,865) | 12,643 | 28,877 | ||||||||||||||
| Income tax benefit (expense) attributable to continuing operations | $ | (4,947) | $ | 9,365 | $ | 23,679 | |||||||||||
The Company recognized income tax expense attributable to continuing operations of $4.9 million in 2025 and income tax benefits attributable to continuing operations of $9.4 million and $23.7 million in 2024 and 2023, respectively. In each of these years, the tax results were significantly impacted by changes in the valuation allowance recorded against deferred tax assets, primarily related to interest expense carryforwards, due to uncertainty regarding the Company’s ability to realize those assets in future periods. In 2025, increases in the valuation allowance contributed to deferred tax expense, which, together with current income tax expense, resulted in an overall income tax expense. In 2024 and 2023, deferred federal income tax benefits were partially offset by valuation allowance adjustments, resulting in net income tax benefits in those periods.
Effective Tax Rate
Loss from Continuing Operations Before Income Taxes
Loss from continuing operations before income taxes was as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. loss from continuing operations before income taxes | $ | (97,864) | $ | (129,658) | $ | (184,894) | |||||||||||
| Foreign income (loss) from continuing operations before income taxes | (936) | (3,471) | 1,771 | ||||||||||||||
| Loss from continuing operations before income taxes | $ | (98,800) | $ | (133,129) | $ | (183,123) | |||||||||||
Tax Rate Reconciliation
The reconciliation of income tax benefit computed at the U.S. federal statutory rate to income tax benefit (expense) attributable to continuing operations is as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent(1) | ||||||||||||||||||||||||||||||
| Income tax benefit at U.S. Federal statutory tax rate | $ | 20,748 | 21.0 | % | $ | 27,957 | 21.0 | % | $ | 38,456 | 21.0 | % | |||||||||||||||||||||||
State and local income tax, net of federal income tax effect(2) | (6,716) | (6.8) | % | (5,237) | (3.9) | % | 5,254 | 2.9 | % | ||||||||||||||||||||||||||
| Foreign tax effects | 545 | 0.6 | % | 45 | — | % | (433) | (0.2) | % | ||||||||||||||||||||||||||
| Changes in valuation allowance | (12,206) | (12.4) | % | (16,357) | (12.3) | % | (13,295) | (7.3) | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items: | |||||||||||||||||||||||||||||||||||
Share-based compensation(3) | (6,723) | (6.8) | % | (3,200) | (2.4) | % | (3,929) | (2.1) | % | ||||||||||||||||||||||||||
Non-deductible penalties | — | — | % | — | — | % | (3,994) | (2.2) | % | ||||||||||||||||||||||||||
| Other | (166) | (0.2) | % | (534) | (0.4) | % | (88) | — | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (293) | (0.3) | % | (738) | (0.6) | % | 507 | 0.3 | % | ||||||||||||||||||||||||||
| Other adjustments, net | (136) | (0.1) | % | 7,429 | 5.6 | % | 1,201 | 0.7 | % | ||||||||||||||||||||||||||
| Income tax benefit (expense) attributable to continuing operations at effective tax rate | $ | (4,947) | (5.0) | % | $ | 9,365 | 7.0 | % | $ | 23,679 | 12.9 | % | |||||||||||||||||||||||
(1)Due to rounding, the total does not equal the sum of the percentages in the table above.
(2)For each of the years ended December 31, 2025, 2024 and 2023, California, New York City, New York State and Florida comprised greater than 50% of the tax effect in this category.
(3)Includes the impact of nondeductible executive compensation.
The effective tax rates for continuing operations of (5.0)%, 7.0% and 12.9% in 2025, 2024 and 2023, respectively, were primarily driven by changes in the valuation allowance recorded against deferred tax assets related to interest expense carryforwards, as well as the impact of state and local income taxes and share-based compensation.
Deferred Taxes
Significant components of deferred tax liabilities and assets as of December 31, 2025 and 2024 are as follows:
| (In thousands) | December 31, | December 31, | |||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax liabilities: | |||||||||||
Operating lease right-of-use assets | $ | 336,098 | $ | 341,623 | |||||||
Intangible assets(1) | 276,333 | 295,486 | |||||||||
| Fixed assets | 39,194 | 45,911 | |||||||||
| Other | 8,496 | 2,861 | |||||||||
| Total deferred tax liabilities | 660,121 | 685,881 | |||||||||
| Deferred tax assets: | |||||||||||
| Operating lease liabilities | 349,866 | 353,752 | |||||||||
Interest expense carryforwards(2) | 136,421 | 130,121 | |||||||||
Net operating loss carryforwards(3) | 100,643 | 89,547 | |||||||||
| Accrued expenses | 12,568 | 12,954 | |||||||||
| Other | 22,152 | 15,573 | |||||||||
| Total deferred tax assets | 621,650 | 601,947 | |||||||||
| Less: Valuation allowance | 183,145 | 137,880 | |||||||||
| Net deferred tax assets | 438,505 | 464,067 | |||||||||
| Net deferred tax liabilities | $ | 221,616 | $ | 221,814 | |||||||
(1)Includes intangible assets that are categorized as indefinite-lived for financial reporting purposes, such as permanent easements and tax-deductible goodwill, which will not reverse over time unless the Company recognizes future impairment charges or disposes of these assets.
(2)Section 163(j) of the Internal Revenue Code generally limits the deductibility of business interest expense and provides that disallowed interest expense may be carried forward indefinitely. In applying the rules under Section 163(j), the Company made the election to be considered an operator of a “real property trade or business” and therefore records a carryforward deferred tax asset for federal and state purposes related to interest expense limitations on its non-real property assets.
(3)At December 31, 2025, the Company had deferred tax assets related to net operating loss carryforwards (tax-effected) of $73.9 million for federal and state income tax purposes and $26.7 million for foreign jurisdictions. Federal and certain state net operating loss carryforwards may be carried forward indefinitely, while remaining state losses expire at various dates through 2045. Foreign loss carryforwards may generally be carried forward without expiration. The realization of these deferred tax assets is dependent upon the generation of sufficient taxable income in the applicable jurisdictions before expiration.
Valuation Allowance and Realization
In assessing the realizability of its deferred tax assets, the Company considers both negative and positive evidence. Negative evidence includes cumulative historical losses in certain jurisdictions, while positive evidence includes the expected reversal of deferred tax liabilities in the same jurisdictions and periods and of the appropriate tax character. Deferred tax liabilities associated with indefinite-lived intangible assets are not relied upon as a source of future taxable income in the Company’s valuation allowance assessment.
Based on this assessment, the Company has recorded valuation allowances on deferred tax assets that it does not expect to realize, primarily related to interest expense carryforwards. At December 31, 2025, valuation allowances totaled $183.1 million, including $156.5 million related to U.S. federal and state jurisdictions and $26.7 million for foreign jurisdictions.
Income Taxes Paid
Income taxes paid, net of refunds received, attributable to continuing operations for 2025, 2024 and 2023 were as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Federal | $ | 553 | $ | 1,952 | $ | 4,276 | |||||||||||
State and local | 2,304 | 1,059 | 2,213 | ||||||||||||||
Foreign(1) | (115) | 1,499 | — | ||||||||||||||
Income taxes paid attributable to continuing operations, net of refunds received | $ | 2,742 | $ | 4,510 | $ | 6,489 | |||||||||||
(1)Amounts shown in parentheses represent net refunds received.
Total income taxes paid, net of refunds received, including amounts attributable to discontinued operations, are presented on the Company’s Consolidated Statements of Cash Flows. Income taxes paid, net of refunds received, attributable to discontinued operations are disclosed in Note 3.
Unrecognized Tax Benefits
The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is generally no longer subject to U.S. federal income tax examinations by tax authorities for years before 2021. The Company is also generally no longer subject to U.S. state, local or non-U.S. income tax examinations for years before 2021, except for an ongoing examination in Texas covering tax years 2008 through 2016.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| Unrecognized Tax Benefits | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of period | $ | 6,981 | $ | 7,989 | $ | 15,586 | |||||||||||
Increases for tax positions taken in current year | 301 | 220 | 196 | ||||||||||||||
| Increases for tax positions taken in previous years | 63 | 1 | 250 | ||||||||||||||
Decreases for tax positions taken in previous years | (369) | (68) | (287) | ||||||||||||||
| Decreases due to settlements with tax authorities | — | (1,055) | — | ||||||||||||||
Decreases due to lapse of statute of limitations | — | (106) | (7,756) | ||||||||||||||
| Balance at end of period | $ | 6,976 | $ | 6,981 | $ | 7,989 | |||||||||||
The total amount of unrecognized tax benefits at December 31, 2025 and 2024 that, if recognized, would impact the Company’s effective income tax rate was $4.1 million.
The Company records interest and penalties related to unrecognized tax benefits in current income tax expense. The Company recognized $0.7 million, $0.6 million and $0.5 million in interest and penalties during 2025, 2024 and 2023, respectively. At December 31, 2025 and 2024, the total amount of interest and penalties accrued was $6.5 million and $5.9 million, respectively.
Unrecognized tax benefits, net of deposits on account with taxing authorities, are reflected on the Company’s Consolidated Balance Sheets as follows: $11.6 million and $11.0 million are included in “Other liabilities” at December 31, 2025 and 2024, respectively. In addition, $1.8 million of unrecognized tax benefits are netted against deferred tax assets related to net operating loss carryforwards at December 31, 2025 and 2024.
U.S. Tax Reform
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted, introducing revisions to the Internal Revenue Code, including modifications to bonus depreciation and interest expense limitations, among other provisions. The Company evaluated and recognized the effects of the OBBB in the third quarter of 2025 and determined that the impacts, which were favorable to the Company, were not material to the consolidated financial statements in the period enacted.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 5, 2019 | |
| 2017 | May 3, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.