iHeartMedia, Inc.IHRT
iHeartMedia, Inc. Income Taxes Disclosure
INCOME TAXES
On July 4, 2025, the U.S. government enacted a sweeping tax and spending reform law known as the One Big Beautiful Bill Act ("OBBBA"), which builds upon and expands the provisions of the 2017 Tax Cuts and Jobs Act and introduces significant changes to the U.S. federal income tax system, effective beginning with the 2025 calendar year. Key provisions of the legislation include the restoration of 100% bonus depreciation, immediate expensing of domestic research and development costs under a new Section 174A, and the reinstatement of the EBITDA-based limitation for the deductibility of business interest under Section 163(j). These provisions were made permanent by the OBBBA.
The Company has recorded the impacts of the new OBBBA tax provisions in its financial statements for 2025. The primary impacts of the legislation were increased tax amortization, depreciation, research and development expenses, and interest deductions in 2025. Additionally, the Company recorded a reduction in its valuation allowance against certain deferred tax assets for the effects of the OBBBA tax provisions in 2025.
On December 20, 2024, the Company completed a debt exchange transaction, as further described in Note 6, Long-Term Debt, which resulted in cancellation of debt income (“CODI”) for US tax purposes of $744.7 million. The CODI was fully excluded from the Company's taxable income under the insolvency exception in Internal Revenue Code (“IRC”) Section 108, requiring a reduction of certain federal capital loss carryforwards and state net operating losses and capital loss carryforwards.
For the year ended December 31, 2024, the company recorded an income tax benefit of $118.2 million related to the net effects of the debt exchange transaction, including excluded CODI, federal and state tax attribute reduction, and resulting changes in valuation allowance.
Significant components of the provision for income tax benefit (expense) are as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Current – Federal | $ | (7,185) | $ | (66,510) | $ | (67,856) | |||||||||||
Current – foreign | (5,149) | (4,845) | (3,001) | ||||||||||||||
Current – state | (2,081) | (7,106) | (11,393) | ||||||||||||||
| Total current expense | (14,415) | (78,461) | (82,250) | ||||||||||||||
Deferred – Federal | 15,733 | 220,078 | 91,658 | ||||||||||||||
Deferred – foreign | 1,880 | 1,682 | 1,714 | ||||||||||||||
Deferred – state | (1,403) | 15,103 | 51,216 | ||||||||||||||
| Total deferred benefit | 16,210 | 236,863 | 144,588 | ||||||||||||||
| Income tax benefit (expense) | $ | 1,795 | $ | 158,402 | $ | 62,338 | |||||||||||
Summary of cash taxes paid for income taxes is below:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal | $ | (11,710) | $ | (9,000) | $ | — | |||||||||||
| State | (1,156) | (2,384) | (9,867) | ||||||||||||||
| Foreign | (3,464) | (2,010) | (4,139) | ||||||||||||||
| Total cash paid for income taxes | $ | (16,330) | $ | (13,394) | $ | (14,006) | |||||||||||
Significant components of the Company's deferred tax liabilities and assets are as follows:
| December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Intangibles | $ | 365,126 | $ | 429,054 | |||||||
| Fixed Assets | 10,123 | 25,344 | |||||||||
| Operating lease right-of-use assets | 158,063 | 168,976 | |||||||||
| Other | 27,230 | — | |||||||||
| Total deferred tax liabilities | 560,542 | 623,374 | |||||||||
| Deferred tax assets: | |||||||||||
| Accrued expenses | 22,309 | 18,159 | |||||||||
| Net operating loss carryforwards | 122,935 | 119,495 | |||||||||
| Interest expense carryforwards | 515,693 | 453,166 | |||||||||
| Long-term debt | 161,064 | 190,935 | |||||||||
| Operating lease liabilities | 185,699 | 198,823 | |||||||||
| Capital loss carryforwards | 8,941 | 5,119 | |||||||||
| Investments | 20,792 | 13,747 | |||||||||
| Bad debt reserves | 10,493 | 11,991 | |||||||||
| Other | 11,882 | 1,265 | |||||||||
| Total gross deferred tax assets | 1,059,808 | 1,012,700 | |||||||||
| Less: Valuation allowance | 585,951 | 492,224 | |||||||||
| Total deferred tax assets | 473,857 | 520,476 | |||||||||
| Net deferred tax liabilities | $ | 86,685 | $ | 102,898 | |||||||
The deferred tax liability related to intangibles primarily relates to the difference in book and tax basis of FCC licenses and other intangible assets which in accordance with ASC 350-10, the Company does not amortize 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, 2025 and 2024 were $6.8 million and $8.6 million, respectively.
At December 31, 2025, the Company had recorded net operating loss and tax credit carryforwards (tax effected) for federal and state income tax purposes of approximately $122.9 million, expiring in various amounts through 2045 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, 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 $515.7 million as of December 31, 2025.
In assessing its ability to realize deferred tax assets, the Company considered all available positive and negative evidence, including historical operating results and expected sources of future taxable income, such as the reversal of deferred tax liabilities. As of December 31, 2025, the Company had recorded a valuation allowance of $586.0 million against a portion of these U.S. federal and state deferred tax assets which it does not expect to realize, relating primarily to disallowed interest carryforwards, certain state net operating loss carryforwards and the remaining capital loss carryforwards. The Company's U.S. federal and state deferred tax valuation allowance increased by $93.7 million during the year ended December 31, 2025 primarily due to increased disallowed interest carryforwards during the year. Any deferred tax liabilities associated with acquired FCC licenses and tax-deductible goodwill intangible assets are 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.
The components of income (loss) before income taxes by U.S. and foreign jurisdictions are as follows:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. | $ | (481,227) | $ | (1,173,517) | $ | (1,166,023) | |||||||||||
| Foreign | 7,545 | 5,621 | 3,346 | ||||||||||||||
| Total loss before income taxes | $ | (473,682) | $ | (1,167,896) | $ | (1,162,677) | |||||||||||
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) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
| U.S. federal statutory tax rate | $ | 99,473 | 21.0 | % | $ | 245,258 | 21.0 | % | $ | 244,162 | 21.0 | % | |||||||||||||||||||||||
State and local income taxes, net of federal income taxes(1) | (9,250) | (1.9) | % | 10,437 | 0.9 | % | 44,923 | 3.9 | % | ||||||||||||||||||||||||||
| Foreign tax effects | (1,685) | (0.4) | % | (1,982) | (0.2) | % | (583) | (0.1) | % | ||||||||||||||||||||||||||
| Tax credits | 2,025 | 0.4 | % | 4,048 | 0.3 | % | 4,592 | 0.6 | % | ||||||||||||||||||||||||||
Changes in valuation allowances(2) | (71,171) | (15.0) | % | 52,858 | 4.5 | % | 47,720 | 4.1 | % | ||||||||||||||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Goodwill impairments | — | — | % | (129,378) | (11.0) | % | (125,047) | (10.7) | % | ||||||||||||||||||||||||||
| Other nondeductible items | (9,696) | (2.0) | % | (10,885) | (0.9) | % | (10,425) | (0.9) | % | ||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (8,089) | (1.7) | % | (6,744) | (0.6) | % | (143,027) | (12.3) | % | ||||||||||||||||||||||||||
| Other adjustments | 188 | — | % | (5,210) | (0.4) | % | 23 | (0.2) | % | ||||||||||||||||||||||||||
| Income tax benefit | $ | 1,795 | 0.4 | % | $ | 158,402 | 13.6 | % | $ | 62,338 | 5.4 | % | |||||||||||||||||||||||
(1)State taxes in California, Florida, New York state and city and Texas make up the majority of the tax effect in this category.
(2)This category includes the effects associated with the enactment of the OBBBA.
The Company’s effective tax rate for the years ended December 31, 2025, 2024, and 2023 were 0.4%, 13.6%, and 5.4%, respectively. The effective tax rates were primarily impacted by the valuation allowance adjustments recorded during the year against certain federal and state deferred tax assets for disallowed interest carryforwards, state net operating losses and federal and state capital loss carryforwards due to the uncertainty of the ability to realize those assets in future periods. In addition, for the years ended December 31, 2024 and 2023, the Company recorded a GAAP impairment charge to its non-deductible goodwill as discussed in Note 4, Property, Plant and Equipment, Intangible Assets and Goodwill.
The Company records interest and penalties related to unrecognized tax benefits in current income tax expense. During the years ended December 31, 2025, 2024, and 2023, the Company recorded $15.3 million, $8.9 million, and $4.4 million, respectively, of net interest and penalties in current income tax expense. The amount of interest accrued at December 31, 2025 and 2024 was $33.5 million and $18.2 million, respectively. The total amount of unrecognized tax benefits including accrued interest and penalties at December 31, 2025 and 2024 was $220.9 million and $166.6 million, respectively, of which $196.3 million and $166.4 million is included in “Other long-term liabilities”. In addition, $24.6 million and $0.2 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, 2025 and 2024, respectively. The total amount of unrecognized tax benefits at December 31, 2025 and 2024 that, if recognized, would impact the effective income tax rate is $49.4 million and $40.9 million, respectively. The following table summarizes the activity in the gross unrecognized tax benefits:
| (In thousands) | Year Ended December 31, | ||||||||||||||||
| Unrecognized Tax Benefits | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of period | $ | 148,401 | $ | 123,822 | 23,823 | ||||||||||||
| Increases for tax position taken in the current year | 24,201 | 10,436 | 52,856 | ||||||||||||||
| Increases for tax positions taken in previous years | 19,814 | 16,521 | 48,194 | ||||||||||||||
| Decreases for tax position taken in previous years | (927) | (933) | — | ||||||||||||||
| Decreases due to settlements with tax authorities | (375) | — | — | ||||||||||||||
| Decreases due to lapse of statute of limitations | (3,751) | (1,445) | (1,051) | ||||||||||||||
| Balance at end of period | $ | 187,363 | $ | 148,401 | $ | 123,822 | |||||||||||
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 2021 are closed. The majority of all material state, local, and foreign income tax matters have been concluded for years through 2020 with the exception of a current examination in Texas that covers the 2007-2016 tax years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 23, 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.