DigitalBridge Group, Inc.DBRG
DigitalBridge Group, Inc. Income Taxes Disclosure
13. Income Taxes
New U.S. Tax Legislation
On July 4, 2025, the legislation formally titled “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the Act”), commonly referred to as the One Big Beautiful Bill Act, was enacted into law. The centerpiece of the bill is the extension of expiring and in some cases, expired provisions of the 2017 Tax Cuts and Jobs Act.
The provisions of this Act could affect the Company's effective tax rate, current tax payable and measurement of the Company's deferred tax assets and liabilities, including its assessment of realizability. Where applicable, the income tax effect of the Act was recognized in 2025, for which the effect was immaterial. The Company continues to evaluate the effects of this new legislation on its consolidated financial statements, noting that interpretation of the various provisions of this Act and their application thereof may change as new information becomes available.
Income Tax Benefit (Expense)
The components of current and deferred tax benefit (expense) are as follows.
| Year Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Income tax benefit (expense) on continuing operations | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Federal | $ | (2,735) | $ | (107) | $ | 167 | ||||||||||||||
| State and local | (2,276) | 946 | 1,058 | |||||||||||||||||
| Foreign | (1,801) | (6,978) | (1,252) | |||||||||||||||||
| Total current tax benefit (expense) | (6,812) | (6,139) | (27) | |||||||||||||||||
| Deferred | ||||||||||||||||||||
| Federal | (7) | — | (1,004) | |||||||||||||||||
| State and local | (2) | — | 124 | |||||||||||||||||
| Foreign | 1,113 | 3,195 | 901 | |||||||||||||||||
| Total deferred tax benefit (expense) | 1,104 | 3,195 | 21 | |||||||||||||||||
| Income tax benefit (expense) on continuing operations | $ | (5,708) | $ | (2,944) | $ | (6) | ||||||||||||||
The Company has no income tax benefits recognized for uncertain tax positions as of and during all periods presented.
Income Tax Payments
Income taxes paid in 2025, net of refunds, is presented by jurisdiction below.
| Year Ended | ||||||||
| (In thousands) | December 31, 2025 | |||||||
| United States | ||||||||
| Federal | $ | 2,921 | ||||||
| State and local | 1,771 | |||||||
| United Kingdom | 1,893 | |||||||
| Other | 114 | |||||||
| Income taxes paid (refunded) | $ | 6,699 | ||||||
Deferred Income Tax Assets and Liabilities
Deferred tax assets and deferred tax liabilities are presented within other assets, and other liabilities, respectively.
The components of deferred tax assets and deferred tax liabilities are as follows.
| (In thousands) | December 31, 2025 | December 31, 2024 | ||||||||||||
| Deferred tax assets | ||||||||||||||
Capital losses (1) | $ | 324,389 | $ | 312,852 | ||||||||||
Net operating losses (2) | 127,150 | 141,094 | ||||||||||||
| Investment in partnerships | — | 83,123 | ||||||||||||
| Equity-based compensation | 8,658 | 10,872 | ||||||||||||
| Intangible assets | 3,893 | 1,495 | ||||||||||||
| Deferred income | 3,916 | 2,013 | ||||||||||||
| Deferred interest expense | 3,170 | 10,663 | ||||||||||||
Lease liability—corporate offices | 5,363 | 12,763 | ||||||||||||
| Other | 14,101 | 9,964 | ||||||||||||
| Gross deferred tax assets | 490,640 | 584,839 | ||||||||||||
| Valuation allowance | (432,050) | (559,556) | ||||||||||||
| Deferred tax assets, net of valuation allowance | 58,590 | 25,283 | ||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Investment in partnerships | (37,470) | — | ||||||||||||
| Intangible assets | (19,392) | (17,639) | ||||||||||||
ROU lease asset—corporate offices | (3,298) | (9,692) | ||||||||||||
| Other | (2,408) | (2,712) | ||||||||||||
| Gross deferred tax liabilities | (62,568) | (30,043) | ||||||||||||
| Net deferred tax asset (liabilities) | $ | (3,978) | $ | (4,760) | ||||||||||
__________
(1) At December 31, 2025 and 2024, deferred tax asset was recognized on capital losses in the U.S. of $1.27 billion and $1.34 billion, respectively, which expire between 2025 and 2028, with full valuation allowance established in both years.
(2) At December 31, 2025 and 2024, deferred tax asset was recognized on NOL totaling $500.2 million and $565.2 million, respectively. The NOL is predominantly attributable to U.S. federal losses incurred after December 31, 2017 that can be carried forward indefinitely, and for which full valuation allowance has been established in both years.
Valuation Allowance
Changes in the deferred tax asset valuation allowance are presented below:
| Year Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Beginning balance | $ | 559,556 | $ | 664,397 | $ | 679,057 | ||||||||||||||
| Addition | — | 1,571 | 19,483 | |||||||||||||||||
| Utilization and/or reversal | (127,506) | (106,412) | (34,143) | |||||||||||||||||
| Ending balance | 432,050 | $ | 559,556 | $ | 664,397 | |||||||||||||||
Deferred Income Taxes
A full valuation allowance has been maintained in all periods presented as the more-likely-than-not threshold continues to not be met in assessing realizability of deferred tax assets of the Company's domestic entities. In future periods, if the realizability of all or some portion of these deferred tax assets becomes more likely than not, the associated valuation allowance would be reversed as a deferred tax benefit.
Foreign Subsidiary Earnings
The Company has evaluated all unremitted earnings of its foreign subsidiaries, which may be repatriated at the Company’s election, and has not recorded any deferred tax liability as no material taxes are expected to be due if and when these amounts are repatriated.
Effective Income Tax
Income tax benefit (expense) attributable to continuing operations varied from the amount computed by applying the statutory income tax rate to income (loss) from continuing operations before income taxes. The effective tax rate is impacted by a variety of factors, including, but not limited to, changes in the sources of income or loss during the period and whether such income or loss is taxable to the Company and its subsidiaries.
The following tables present reconciliations of the statutory U.S. income tax to the Company's effective income tax attributable to continuing operations for 2025, 2024 and 2023.
| Year Ended December 31, 2025 | ||||||||||||||
| (In thousands) | Amount | Percentage | ||||||||||||
| Income (Loss) from continuing operations before income taxes | ||||||||||||||
| United States | $ | (18,237) | ||||||||||||
| Foreign | 1,203 | |||||||||||||
| (17,034) | ||||||||||||||
| Federal income tax benefit (expense) at statutory tax rate (21%) | 3,577 | (21) | % | |||||||||||
| State and local income taxes, net of federal income tax benefit | (2,323) | 14 | % | |||||||||||
| Foreign statutory tax rate differential | (282) | 2 | % | |||||||||||
| Effect of cross-border tax laws - global intangible low-taxed income | (390) | 2 | % | |||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Noncontrolling interests | (35,448) | 208 | % | |||||||||||
| Equity-based compensation | (2,163) | 13 | % | |||||||||||
| Other | 1,445 | (8) | % | |||||||||||
| Other adjustments | ||||||||||||||
| Separately taxable subsidiaries of OP | (20,202) | 119 | % | |||||||||||
| Equity-based compensation | (4,129) | 24 | % | |||||||||||
| Investment in partnerships | (76,570) | 450 | % | |||||||||||
| Other | (2,057) | 12 | % | |||||||||||
| Valuation allowance | 132,834 | (780) | % | |||||||||||
| Income tax benefit (expense) on continuing operations | $ | (5,708) | 34 | % | ||||||||||
| Year Ended December 31, | ||||||||||||||
| (In thousands) | 2024 | 2023 | ||||||||||||
| Income (Loss) from continuing operations before income taxes | $ | 168,815 | $ | 365,629 | ||||||||||
| Federal income tax benefit (expense) at statutory tax rate (21%) | (35,451) | (76,782) | ||||||||||||
| State and local income taxes, net of federal income tax benefit | (61,053) | 12,714 | ||||||||||||
| Foreign income tax differential | (226) | 36 | ||||||||||||
| Noncontrolling interests | 16,070 | (27,699) | ||||||||||||
| Separately taxable subsidiaries of OP | (2,361) | 15,213 | ||||||||||||
| Equity-based compensation | (3,861) | 682 | ||||||||||||
| Valuation allowance | 84,562 | 76,087 | ||||||||||||
| Other, net | (624) | (257) | ||||||||||||
| Income tax benefit (expense) on continuing operations | $ | (2,944) | $ | (6) | ||||||||||
Tax Examinations
The Company is no longer subject to new income tax examinations by U.S. and UK tax authorities for years prior to 2022 and 2021, respectively.Free Sentinel
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
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.