USA TODAY Co., Inc.TDAY
USA TODAY Co., Inc. Income Taxes Disclosure
NOTE 12 — Income taxesThe following table outlines the Company's Loss before income taxes:
The following table outlines the Company's (Benefit) provision for income taxes:
The effective tax rate varies from the federal statutory tax rate as a result of the following differences:
(a) For the year ended December 31, 2025, s
Year ended December 31, | |||||
In thousands | 2025 | 2024 | 2023 | ||
Domestic | $(58,661) | $(128,806) | $(55,073) | ||
Foreign | 57,386 | 51,133 | 48,908 | ||
Loss before income taxes | $(1,275) | $(77,673) | $(6,165) | ||
Year ended December 31, | |||||
In thousands | 2025 | 2024 | 2023 | ||
Current: | |||||
Federal | $(13) | $(15,979) | $(311) | ||
State and local | 1,257 | 1,780 | 1,705 | ||
Foreign | 6,002 | 7,671 | 8,821 | ||
Total current | 7,246 | (6,528) | 10,215 | ||
Deferred: | |||||
Federal | (12,735) | (38,805) | 6,436 | ||
State and local | (3,180) | (2,493) | 399 | ||
Foreign | 5,639 | (3,460) | 4,679 | ||
Total deferred | (10,276) | (44,758) | 11,514 | ||
(Benefit) provision for income taxes | $(3,030) | $(51,286) | $21,729 | ||
In thousands, except percentages | Year ended December 31, 2025 | |
U.S. federal statutory rate | $(268) | 21.0% |
U.S. | ||
State and local income taxes, net of federal income tax effect(a) | (2,187) | 171.5% |
Effect of cross-border tax laws | ||
Global intangible low-taxed income | 8,735 | (685.1)% |
Other | 95 | (7.5)% |
Tax credits | ||
Research and development tax credits | (7,216) | 566.0% |
Changes in valuation allowances | (6,454) | 506.2% |
Nontaxable or nondeductible items | ||
Nondeductible compensation | 1,360 | (106.7)% |
Other | 1,169 | (91.7)% |
Other adjustments | ||
Other | 2,160 | (169.4)% |
Foreign tax effects | ||
U.K. | ||
Statutory tax rate difference between the U.S. and U.K. | 2,159 | (169.3)% |
Foreign exchange and tax rate changes | (1,606) | 126.0% |
Changes in valuation allowances | (2,497) | 195.8% |
Other | 576 | (45.2)% |
Other foreign jurisdictions | (429) | 33.6% |
Changes in unrecognized tax benefits | 1,373 | (107.7)% |
Benefit for income taxes | $(3,030) | 237.6% |
Year ended December 31, | |||
In percentage | 2024 | 2023 | |
Federal statutory tax rate | 21.0% | 21.0% | |
(Increase) decrease in taxes resulting from: | |||
State and local income taxes, net of federal benefit | (0.5) | 3.6 | |
Debt refinancing | 37.8 | — | |
Change in valuation allowance | (0.2) | (130.0) | |
Foreign tax rates differences | (1.0) | (9.2) | |
Non-deductible parking | (0.1) | (2.5) | |
Non-deductible meals, entertainment | (1.0) | (12.8) | |
(Loss) gain on foreign exchange rate | (0.6) | 2.4 | |
Stock compensation shortfall | (1.2) | (24.2) | |
Partnership permanent differences | (0.1) | (2.0) | |
Tegna indemnification release | — | (2.8) | |
Foreign entities loss adjustments | (1.4) | (1.3) | |
Newsquest permanent differences | (0.7) | (7.6) | |
Nondeductible compensation | (1.0) | (13.4) | |
Provision to return and deferred tax adjustments | 5.2 | (45.1) | |
Global intangible low-taxed income | (10.0) | (112.7) | |
Branch income | 1.2 | 5.4 | |
Profit on non-qualifying land and buildings | 0.2 | 0.2 | |
Uncertain tax positions | 19.0 | (134.5) | |
Deduction for interest expense | — | 102.7 | |
Impact of non-deductible goodwill | (0.5) | — | |
Other expenses | (0.1) | 10.3 | |
Effective tax rate | 66.0% | NM | |
NM indicates not meaningful.
Our effective tax rate for the year ended December 31, 2025 was 237.6%. The tax benefit for 2025 was primarily impacted by the generation of research and development tax credits, the release of valuation allowances on capital loss carryforwards,
and the pre-tax book loss, partially offset by the increase in valuation allowances on non-deductible U.S. interest expense
carryforwards and the global intangible low-taxed income inclusion.
Our effective tax rate for the year ended December 31, 2024 was 66.0%. The tax benefit for 2024 was primarily impacted
by the release of uncertain tax position reserves related to an IRS audit, the release of foreign valuation allowances, debt
refinancing transactions and the pre-tax book loss, partially offset by the increase in valuation allowances on non-deductible
U.S. interest expense carryforwards and the global intangible low-taxed income inclusion.
Our effective tax rate for the year ended December 31, 2023 was not meaningful. The tax provision for 2023 was primarily
impacted by the valuation allowances on non-deductible U.S. interest expense carryforwards, the global intangible low-taxed
income inclusion, the release of uncertain tax positions in the U.S., and the reduction in the blended state tax rate, which were
offset by the tax benefit of the pre-tax book loss.
The tax effects of each type of temporary differences and carryforwards that give rise to significant portions of our deferred tax assets and deferred tax liabilities are presented below:
December 31, | |||
In thousands | 2025 | 2024 | |
Deferred tax assets: | |||
Fixed assets | $5,961 | $4,474 | |
Accrued compensation costs | 9,420 | 13,167 | |
Accrued liabilities | 16,041 | 17,787 | |
Disallowed interest | 124,816 | 121,110 | |
Goodwill | — | 162 | |
Capitalized research and development costs | 17,607 | 11,572 | |
Partnership investments | — | 4,961 | |
Loss carryforwards | 196,585 | 203,602 | |
Lease liabilities | 43,248 | 50,826 | |
Definite and indefinite lived intangible assets | 7,773 | — | |
Other | 25,414 | 15,130 | |
Total deferred tax assets | $446,865 | $442,791 | |
Less: Valuation allowances | (298,033) | (304,673) | |
Total net deferred tax assets | $148,832 | $138,118 | |
Deferred tax liabilities: | |||
Partnership investments | (1,130) | — | |
Goodwill | (825) | — | |
Right-of-use assets | (36,406) | (43,157) | |
Convertible debt | (21,218) | (22,472) | |
Pension and other postretirement benefit obligations | (19,537) | (9,380) | |
Definite and indefinite lived intangible assets | — | (7,054) | |
Total deferred tax liabilities | $(79,116) | $(82,063) | |
Net deferred tax assets | $69,716 | $56,055 | |
In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. During the
year ended December 31, 2025, the Company recorded a reduction of $6.6 million of valuation allowances against its deferred
tax assets. The decrease in the valuation allowance was primarily due to a decrease of $3.6 million related to foreign valuation
allowances and a decrease of $11.6 million related to the release of capital loss carryforward valuation allowances, partially
offset by an increase in the U.S. disallowed interest expense carryforward of $3.7 million, the impact related to currency
translation adjustments of $3.9 million and various other increases in the valuation allowance of $1.0 million. The Company
considered the available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a
valuation allowance for deferred tax assets was needed. The Company reached the conclusion it was appropriate to record a
valuation allowance against a portion of its federal deferred tax assets based on available evidence. We relied on evidence
shown by reversing taxable temporary differences, as well as expectations of future taxable income with the appropriate tax
character.
The following table summarizes the activity related to our valuation allowance for deferred tax assets for the year ended December 31, 2025 (In thousands):
Balance at beginning of period | Additions/ (reductions) charged to expenses | Additions/ (reductions) for acquisitions/ dispositions | Other additions to (deductions from) reserves | Foreign currency translation | Balance at end of period | |||||
$304,672 | $(10,538) | $— | $— | $3,899 | $298,033 |
The aforementioned valuation allowance relates to indefinite-lived intangible assets, nondeductible interest expense
carryforwards, capital losses, state and foreign net operating losses and other tax attributes.
As of December 31, 2025, the Company had $409.8 million of Federal net operating loss ("NOL") carryforwards, $518.0
million of Federal disallowed business interest expense carryforwards, $1.1 billion of apportioned state NOL carryforwards and
$170.0 million of foreign NOL carryforwards. Additionally, as of December 31, 2025, the Company had $13.7 million of other
business tax credits, $0.2 million of foreign tax credits, $4.7 million of state credits and $46.8 million of foreign capital loss
carryforwards. The Federal NOL carryforwards begin to expire in 2034. The state NOL carryforwards began to expire in 2025
and the state tax credits begin to expire in 2026. The foreign NOLs are not subject to expiration and have an indefinite life. The
Company's NOLs may be subject to limitations under Section 382 of the Internal Revenue Code, which restricts the annual
amount of NOLs that may be utilized to offset consolidated U.S. taxable income. In addition, the Company's ability to utilize its
NOLs may be subject to review by the relevant tax authorities in the jurisdictions in which such NOLs were generated.
The following table summarizes the change in unrecognized tax benefits, excluding the federal tax benefit of state tax deductions:
Year ended December 31, | |||||
In thousands | 2025 | 2024 | 2023 | ||
Balance at beginning of year | $41,727 | $52,821 | $43,697 | ||
Additions based on tax positions related to the current year | 1,446 | 837 | 7,017 | ||
Additions for tax positions of prior years | 446 | 8 | 1,327 | ||
Reductions for tax positions of prior years | (574) | (11,261) | (652) | ||
Reductions due to lapsed statutes of limitations | (12) | (137) | (208) | ||
Foreign currency translation | 2,999 | (541) | 1,640 | ||
Balance at end of year | $46,032 | $41,727 | $52,821 | ||
At December 31, 2025, the Company's uncertain tax positions of $46.0 million, if recognized, would impact the effective
tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax
expense. As of December 31, 2025 and 2024, the amount of accrued interest and penalties payable related to uncertain tax
positions was immaterial.
The Company files a federal consolidated income tax return for which the statute of limitations remains open for any year in which a net operating loss is utilized, which for the Company is the 2011 tax year and subsequent years. U.S. state
jurisdictions have statute of limitations generally ranging from 3 to 6 years. On November 19, 2019, New Media Investment
Group Inc. ("New Media") completed its acquisition of Gannett Co., Inc. (which was renamed USA TODAY Media Corp. and
is referred to as "Legacy Gannett"). The U.K. income tax returns for calendar years 2018-2023 for Newsquest Capital Ltd. are
under audit. The statute of limitations for the Company's U.K. income tax return remains open for tax years for 2024 and
forward.
Cash paid for income taxes, net of refunds receivedThe following table summarizes the Company's cash paid for income taxes, net of refunds received:
Year ended December 31, | |||||
In thousands | 2025 | 2024 | 2023 | ||
State and local | $1,623 | $738 | $920 | ||
Foreign: | |||||
U.K.(a) | 8,279 | 8,929 | 6,937 | ||
Other | 709 | 448 | 365 | ||
Cash paid for income taxes, net of refunds received | $10,611 | $10,115 | $8,222 | ||
(a) For the years ended December 31, 2025, 2024 and 2023, the U.K. was the only jurisdiction with cash paid for income taxes that equaled or exceeded 5% of
total income taxes paid.
Recently enacted U.S. tax legislationOn July 4, 2025, the President signed into law H.R. 1, titled the "One Big Beautiful Bill Act" (the "Act"), which introduced
significant tax law changes with varying effective dates for businesses. The Company has evaluated the provisions of the Act
on the Consolidated financial statements, and its impact was included in the Company's income tax provision for the year ended
December 31, 2025. Key provisions of the Act applicable to the Company include the reinstatement of EBITDA, rather than
EBIT, in determining adjusted taxable income under Section 163(j), the immediate expensing of domestic research and
experimental expenditures, and the extension of 100% bonus depreciation for qualified property placed in service after January
19, 2025. Beginning with 2026, the legislation also makes changes to the Global Intangible Low-Taxed Income regime,
including an increase in the effective tax rate and modifications to the calculation of tested income. As a result of the changes in
determining adjusted taxable income under Section 163(j), the Company's limitation on the deductibility of business interest
expense and our corresponding valuation allowance on non-deductible U.S. interest expense carryforwards was reduced.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 21, 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.