Versant Media Group, Inc.VSNT
Versant Media Group, Inc. Income Taxes Disclosure
Income Taxes
During the periods presented in these combined financial statements, our operations were included in the combined U.S. federal, state and foreign income tax returns filed by Comcast. Income tax expense and other income tax related information contained in the combined financial statements are calculated as if we were a separate corporation that filed separate income tax returns. We believe the assumptions underlying the calculation of income taxes on a separate return basis are reasonable. However, income tax expense and liabilities as presented in these combined financial statements do not necessarily reflect the results that we would have reported as an independent, standalone company for the periods presented.
Income Before Income Taxes
| Year ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Domestic | $ | 1,222 | $ | 1,823 | $ | 2,041 | ||||||||||||||
| Foreign | 6 | 20 | 28 | |||||||||||||||||
| $ | 1,228 | $ | 1,843 | $ | 2,069 | |||||||||||||||
Components of Income Tax Expense
| Year ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Current Expense (Benefit): | ||||||||||||||||||||
| Federal | $ | 334 | $ | 472 | $ | 508 | ||||||||||||||
| State | 102 | 143 | 150 | |||||||||||||||||
| Foreign | — | 7 | 6 | |||||||||||||||||
| 436 | 623 | 665 | ||||||||||||||||||
| Deferred Expense (Benefit): | ||||||||||||||||||||
| Federal | (110) | (111) | (104) | |||||||||||||||||
| State | (29) | (33) | (32) | |||||||||||||||||
| Foreign | — | (1) | — | |||||||||||||||||
| (139) | (145) | (135) | ||||||||||||||||||
| Income tax expense | $ | 297 | $ | 478 | $ | 530 | ||||||||||||||
Our income tax expense (benefit) differs from the federal statutory amount because of the effect of the items detailed in the table below.
| Year ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| $ | 258 | 21.0 | % | $ | 387 | 21.0 | % | $ | 435 | 21.0 | % | ||||||||||||||||||
State income taxes, net of federal benefit (a) | 57 | 4.7 | % | 86 | 4.7 | % | 97 | 4.7 | % | ||||||||||||||||||||
| Changes in valuation allowance | (23) | (1.9) | % | — | — | % | — | — | % | ||||||||||||||||||||
| Other | 5 | 0.4 | % | 5 | 0.3 | % | (2) | (0.1) | % | ||||||||||||||||||||
| Effective tax rate | $ | 297 | 24.2 | % | $ | 478 | 26.0 | % | $ | 530 | 25.6 | % | |||||||||||||||||
(a) The majority of the tax effect in this category was attributable to state taxes in for each of the years presented.
We base our provision for income taxes on our current period income, changes in our deferred income tax assets and liabilities, income tax rates, changes in estimates of our uncertain tax positions, tax planning opportunities available in the jurisdictions in which we operate and excess tax benefits or deficiencies that arise when the tax consequences of share-based compensation differ from amounts previously recognized in the statements of income. Current income tax expense has been offset by a corresponding change in net Comcast investment on the combined balance sheet. We recognize deferred tax assets and liabilities when there are temporary differences between the financial reporting basis and tax basis of our assets and liabilities and for the expected benefits of using net operating loss carryforwards. The determination of the realization of the net operating loss carryforwards is dependent on our subsidiaries’ taxable income or loss, redetermination from taxing authorities, and laws that can change from year to year and impact the amount of such carryforwards. We recognize a valuation allowance if we determine it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. When a change in the tax rate or tax law has an impact on deferred taxes, we apply the change based on the years in which the temporary differences are expected to reverse. We record the change in our combined financial statements in the period of enactment.
Federal Legislation
On July 4, 2025, the U.S. H.R.1. legislation (“H.R.1.”) was enacted in the United States and provides, among other things, for immediate deduction of 100% of the costs of qualified property, including significant portions of our capital expenditures and film and television production costs, acquired and placed into service after January 19, 2025, compared to the 40% and 20% deductions that would have applied in 2025 and 2026, respectively, under prior law. H.R.1 also reinstates the immediate deduction of domestic research and development expenses, retroactive to 2022, repealing the prior requirement to capitalize and amortize such costs over five years. H.R.1 resulted in a reduction in our income tax obligation in net Comcast investment of approximately $15 million and a corresponding increase in our deferred tax liability. There is no material impact on our income tax expense or effective tax rate.
Components of Net Deferred Tax Liability
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| (in millions) | ||||||||||||||
| Deferred Tax Assets: | ||||||||||||||
| Net operating loss and other loss carryforwards | $ | 4 | $ | 28 | ||||||||||
| Investments | 30 | 26 | ||||||||||||
| Nondeductible accruals and other | 25 | 11 | ||||||||||||
| Less: Valuation allowance | (12) | (37) | ||||||||||||
| 47 | 27 | |||||||||||||
| Deferred Tax Liabilities: | ||||||||||||||
Property and equipment | 66 | 15 | ||||||||||||
Intangible assets | 169 | 437 | ||||||||||||
| 235 | 452 | |||||||||||||
| Net deferred tax liability | $ | 188 | $ | 425 | ||||||||||
Changes in our Valuation Allowance for Deferred Tax Assets
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Beginning balance | $ | 37 | $ | 36 | $ | 36 | ||||||||||||||
| Additions charged to income tax expense and other accounts | 10 | 1 | — | |||||||||||||||||
| Deductions from reserves | (35) | — | — | |||||||||||||||||
| Ending balance | $ | 12 | $ | 37 | $ | 36 | ||||||||||||||
As of December 31, 2025 and 2024, net operating loss carryforwards primarily related to subsidiaries included in our combined financial statements, which can be carried forward indefinitely. At December 31, 2025 our valuation allowances primarily related to these net operating loss carryforwards and the impairment of certain investments. The reduction in our net operating loss carryforwards and valuation allowance in 2025 primarily resulted from a change in the tax status of one of our subsidiaries.
Uncertain Tax Positions
From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. In these cases, we evaluate our tax position using the recognition threshold and the measurement attribute in accordance with the accounting guidance related to uncertain tax positions. Examples of these transactions include the allocation of income among state and local tax jurisdictions. Significant judgment is required in assessing and estimating the tax consequences of these transactions. We determine whether it is more likely than not that a tax position will be sustained on examination, including the resolution of any related appeals or litigation processes, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is measured
to determine the amount of benefit to be recognized in our combined financial statements. We classify interest and penalties, if any, associated with our uncertain tax positions as a component of income tax expense (benefit). Our liability for uncertain tax positions was not material in any period presented.
The IRS has completed its examination of Comcast’s income tax returns for all years through 2022. Various states and foreign jurisdictions are examining Comcast’s tax returns and the tax years of those tax returns currently under examination vary by state, with most of the periods relating to tax years 2011 and forward.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.