NEXSTAR MEDIA GROUP, INC. Income Taxes Disclosure
Note 14: Income Taxes
The income tax expense (benefit) consisted of the following components for the years ended December 31 (in millions):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current tax expense: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
160 |
|
|
$ |
246 |
|
|
$ |
170 |
|
State |
|
|
36 |
|
|
|
63 |
|
|
|
37 |
|
|
|
|
196 |
|
|
|
309 |
|
|
|
207 |
|
Deferred tax benefit: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
(98 |
) |
|
|
(28 |
) |
|
|
(60 |
) |
State |
|
|
(31 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
|
|
|
(129 |
) |
|
|
(33 |
) |
|
|
(76 |
) |
Income tax expense |
|
$ |
67 |
|
|
$ |
276 |
|
|
$ |
131 |
|
The following is a reconciliation of the federal statutory income tax rate to income tax expense for the years ended December 31 (in millions):
|
|
2025 |
|
2024 |
|
2023 |
|
||||||||||
US federal statutory tax rate |
|
$ |
32 |
|
21.0% |
|
$ |
201 |
|
21.0% |
|
$ |
84 |
|
21.0% |
|
|
State and local income taxes, net of federal income tax effect(1) |
|
|
7 |
|
4.7% |
|
|
43 |
|
4.5% |
|
|
18 |
|
4.5% |
|
|
Changes in valuation allowances |
|
|
6 |
|
4.0% |
|
|
1 |
|
0.1% |
|
|
10 |
|
2.5% |
|
|
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Compensation |
|
|
11 |
|
7.3% |
|
|
12 |
|
1.3% |
|
|
8 |
|
2.0% |
|
|
Meals and entertainment |
|
|
3 |
|
2.0% |
|
|
3 |
|
0.3% |
|
|
3 |
|
0.7% |
|
|
Noncontrolling interest |
|
|
4 |
|
2.7% |
|
|
7 |
|
0.7% |
|
|
14 |
|
3.5% |
|
|
Goodwill impairment |
|
|
3 |
|
2.0% |
|
|
5 |
|
0.5% |
|
|
- |
|
|
- |
|
Others |
|
|
1 |
|
1.0% |
|
|
4 |
|
0.4% |
|
|
(6 |
) |
(1.5%) |
|
|
Income tax expense |
|
$ |
67 |
|
44.7% |
|
$ |
276 |
|
28.8% |
|
$ |
131 |
|
32.7% |
|
|
The following is a summary of cash income taxes paid (net of refunds) for the years ended December 31 (in millions):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Income taxes paid, net of refunds: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
176 |
|
|
$ |
205 |
|
|
$ |
144 |
|
State and local |
|
|
32 |
|
|
|
49 |
|
|
|
25 |
|
Income taxes paid, net of refunds |
|
$ |
208 |
|
|
$ |
254 |
|
|
$ |
169 |
|
The components of the net deferred tax asset (liability) were as follows, as of December 31 (in millions):
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
33 |
|
|
$ |
34 |
|
Compensation |
|
|
6 |
|
|
|
6 |
|
Rent |
|
|
68 |
|
|
|
69 |
|
Pension |
|
|
44 |
|
|
|
53 |
|
Other |
|
|
46 |
|
|
|
44 |
|
Total deferred tax assets |
|
|
197 |
|
|
|
206 |
|
Valuation allowance for deferred tax assets |
|
|
(57 |
) |
|
|
(52 |
) |
Total deferred tax assets |
|
|
140 |
|
|
|
154 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Property and equipment |
|
|
(170 |
) |
|
|
(178 |
) |
Other intangible assets |
|
|
(299 |
) |
|
|
(357 |
) |
Goodwill |
|
|
(183 |
) |
|
|
(158 |
) |
FCC licenses |
|
|
(692 |
) |
|
|
(678 |
) |
Rent |
|
|
(64 |
) |
|
|
(68 |
) |
Investments |
|
|
(42 |
) |
|
|
(160 |
) |
Other |
|
|
(44 |
) |
|
|
(42 |
) |
Total deferred tax liabilities |
|
|
(1,494 |
) |
|
|
(1,641 |
) |
Net deferred tax liabilities |
|
$ |
(1,354 |
) |
|
$ |
(1,487 |
) |
As of December 31, 2025, the Company’s reserve for uncertain tax positions totaled approximately $26 million. For the years ended December 31, 2025, 2024 and 2023 there were $26 million, $27 million and $27 million of gross unrecognized tax benefits, respectively, that would reduce the effective tax rate if the underlying tax positions were sustained or settled favorably. The Company has not recorded any tax reserves related to the Chicago Cubs Transactions as further described in Note 11.
A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows (in millions):
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Uncertain tax position liability at the beginning of the year |
|
$ |
27 |
|
|
$ |
27 |
|
|
$ |
28 |
|
Increases related to current year positions |
|
|
- |
|
|
|
1 |
|
|
|
- |
|
Decreases related to settlements with taxing authorities |
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
Decreases related to expiration of statute of limitations |
|
|
- |
|
|
|
(1 |
) |
|
|
(1 |
) |
Uncertain tax position liability at the end of the year |
|
$ |
26 |
|
|
$ |
27 |
|
|
$ |
27 |
|
The Company’s liability for unrecognized tax benefits totaled $26 million and $27 million at December 31, 2025 and 2024, respectively. If all of the unrecognized tax benefits at those dates had been recognized, there would have been a favorable $26 million and $27 million impact on the Company’s reported income tax expense in 2025 and 2024, respectively.
As allowed by ASC Topic 740, the Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense in the accompanying Consolidated Statements of Operations. The Company’s accrued interest and penalties related to uncertain tax positions were $13 million, $12 million and $9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Although management believes its estimates and judgments are reasonable, the resolutions of the Company’s tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than those which have been provided by the Company.
There can be no assurance that the outcomes from any tax examinations will not have a significant impact on the amount of such liabilities, which could have an impact on the operating results or financial position of the Company.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Tribune acquired entities are currently undergoing federal audits for tax periods including 2014–2015 and 2018–2019. Protective claims for refund have been filed for 2013, 2016 and 2017 to keep the periods open for specific issues relating to the potential Cubs resolution. Nexstar is subject to U.S. federal tax examinations for years after 2020. The Company currently has various state income tax returns in the process of examination or administrative appeal. Additionally, any net operating loss carry-forwards (“NOLs”) that were generated in prior years and utilized in the current year or future years may also be subject to examination by the Internal Revenue Service. Generally, the Company is subject to state tax examination for years after 2018 and any NOLs that were generated in prior years and utilized in the current year or future years may also be subject to examination.
The Company has gross federal and state income tax NOL carryforwards of $124 million and $132 million, respectively, which are available to reduce future taxable income if utilized before their expiration. A valuation allowance has been recorded against $118 million of federal NOLs and $78 million of state NOLs attributable to one of the consolidated VIEs. Federal NOLs generated prior to 2018 will expire through 2037 if not utilized. Federal NOLs generated after 2017 carry forward indefinitely. State NOLs will expire through 2045 if not utilized. Section 382 of the Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. Ownership changes are evaluated as they occur and could limit the ability to use NOLs. As of December 31, 2025, the Company does not expect any NOLs to expire as a result of Section 382 limitations.
The ability to use NOLs is also dependent upon the Company’s ability to generate taxable income. The NOLs could expire before the Company generates sufficient taxable income. To the extent the Company’s use of NOLs is significantly limited, the Company’s income could be subject to corporate income tax earlier than it would if it were able to use NOLs, which could have a negative effect on the Company’s financial results and operations.
On July 4, 2025, H.R.1, also known as the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which includes significant changes to federal tax law and other regulatory provisions that are applicable to the Company in 2025. The provisions of the OBBA did not materially impact the annual effective rate in 2025, but did impact the split between current taxes payable and deferred taxes.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 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.