Liberty Live Holdings, Inc. Income Taxes Disclosure

(9)  Income Taxes

Certain entities and activities of Liberty Live were included in the federal and state combined income tax returns of Liberty Media during the periods prior to the Split-Off.  The tax provision included in these consolidated financial statements has been prepared on a stand-alone basis, as if Liberty Live had not been part of the consolidated Liberty Media tax group.  To the extent tax benefits generated by Liberty Live were allocated to Liberty Media upon the Split-Off, a tax sharing receivable from Liberty Media was recorded at Liberty Live.

Income tax expense (benefit) consists of:

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The following table presents a summary of our domestic and foreign earnings (loss) from continuing operations before income taxes:

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Expected income tax expense (benefit) differs from the amounts computed by applying the U.S. federal income tax rate of 21% for the years ended December 31, 2025 and 2024 as a result of the following:

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For both of the years ended December 31, 2025 and 2024, state and local income taxes in Colorado comprised the majority of the domestic state and local income taxes, net of federal effect category.

During the year ended December 31, 2025, income tax benefit was less than the U.S. statutory rate of 21% primarily due to costs incurred in connection with the Split-Off that are not deductible for tax purposes.

During the year ended December 31, 2024, income tax benefit does not materially differ from the U.S. statutory rate of 21% due to state income tax benefits on losses, offset by earnings in foreign jurisdictions taxed at rates higher than the 21% U.S. federal rate.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

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During the year ended December 31, 2025, there was a $1,094 thousand increase in the Company’s valuation allowance due to the Split-Off related to certain state net operating losses (“NOLs”), which was recorded through additional paid-in capital.

At December 31, 2025, the Company had deferred tax assets of $97,058 thousand for federal and state net operating losses and interest expense carryforwards, which may be utilized to offset taxable income in future years. Of this amount, the Company has $4,418 thousand of federal NOLs, $1,149 thousand of state NOLs, $89,377 thousand of federal interest expense carryforwards, and $2,114 thousand of state interest expense carryforwards. These losses and interest carryforwards are expected to be utilized prior to expiration, except for $1,094 thousand, which, based on current projections, will not be utilized in the future and are subject to a valuation allowance. The Company believes that it is more likely than not that it will realize the benefits of these deferred tax assets based upon the Company’s ability to generate taxable income in future periods upon the implementation of certain business strategies or transactions.

As of December 31, 2025 and 2024, the Company had not recorded tax reserves related to unrecognized tax benefits for uncertain tax positions.

Prior to the Split-Off, certain entities and activities attributed to Liberty Live were included in the federal and state combined income tax returns of Liberty Media during the periods presented.  As of December 31, 2025, Liberty Media’s tax years prior to 2022 are closed for federal income tax purposes. The IRS has completed its examination of Liberty Media’s 2022 tax year, but 2022 remains open until the statute of limitations lapses on October 15, 2026. Liberty Media’s 2023 and 2024 tax years are under examination by the IRS and remain open until the statue of limitations lapses on October 15, 2027, and 2028, respectively. Liberty Media’s 2025 tax year is currently under examination as part of the IRS Compliance Assurance Process program. Various states are currently examining Liberty Media’s prior years’ state income tax returns.