Liberty Media Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2025

Income Taxes

Income Taxes

(9) Income Taxes

Income tax expense (benefit) consists of:


	Years ended December 31,
	2025		2024	2023

	amounts in millions
Current:
Federal	$	—	(37)	(31)
State and local		—	(6)	(1)
Foreign		119	58	41
		119	15	9
Deferred:
Federal		(8)	1	36
State and local		7	(1)	1
Foreign		19	29	(22)
		18	29	15
Total:
Federal		(8)	(36)	5
State and local		7	(7)	—
Foreign		138	87	19
Income tax expense (benefit)	$	137	44	24

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


	Years ended December 31,
	2025		2024	2023

	amounts in millions
Domestic	$	288	(444)	(177)
Foreign		445	444	274
Total	$	733	—	97

Expected income tax expense (benefit) differs from the amounts computed by applying the U.S. federal income tax rate of 21% as a result of the following:


	Years ended December 31,
	2025				2024			2023

	dollar amounts in millions
U.S. Federal statutory tax rate	$	154	21	%	—	21	%	20	21	%
Domestic federal reconciling items
Tax credits		(1)	—	%	—	n/m		—	—	%
Nontaxable or nondeductible items
(Nontaxable gain) / nondeductible loss		(69)	(9)	%	49	n/m		17	18	%
Nondeductible executive compensation		6	1	%	10	n/m		4	4	%
Capitalized transaction costs		4	1	%	7	n/m		3	3	%
Other		(12)	(2)	%	(2)	n/m		(3)	(3)	%
Cross-border tax laws
Global intangible low-taxed income		(6)	(1)	%	1	n/m		10	10	%
Subpart F		—	—	%	(9)	n/m		11	11	%
Other
Change in valuation allowance		17	2	%	2	n/m		4	4	%
Domestic state and local income taxes, net of federal effect		6	1	%	(6)	n/m		—	—	%
Foreign reconciling items
United Kingdom
Rate differential		23	3	%	12	n/m		2	2	%
Stock compensation		(4)	(1)	%	(11)	n/m		(2)	(2)	%
Nondeductible interest		—	—	%	7	n/m		(19)	(20)	%
Tax credits		(9)	(1)	%	(9)	n/m		(8)	(8)	%
Other		9	1	%	4	n/m		1	1	%
Cayman Islands - rate differential		—	—	%	(22)	n/m		(25)	(26)	%
Italy - withholding taxes		6	1	%	6	n/m		6	6	%
Luxembourg
Nondeductible interest		10	1	%	—	n/m		—	—	%
Other		(4)	(1)	%	3	n/m		(2)	(2)	%
Other jurisdictions		7	1	%	2	n/m		5	5	%
Income tax expense (benefit)	$	137	18	%	44	n/m		24	24	%

n/m – Percentages are not meaningful when earnings (loss) from continuing operations before income taxes is zero.

For the years ended December 31, 2025, 2024 and 2023, state and local income taxes in Colorado comprised the majority of the domestic state and local income taxes, net of federal effect category.

For the year ended December 31, 2025, the Company recognized income tax expense less than the expected federal rate of 21% primarily due to certain gains that are not taxable, partially offset by earnings in foreign jurisdictions taxed at rates higher than the 21% U.S. federal rate and an increase in our valuation allowance.

For the year ended December 31, 2024, the Company recognized income tax expense primarily due to certain losses that are not deductible for tax purposes, partially offset by tax benefits related to stock-based compensation and earnings in foreign jurisdictions taxed at rates lower than the 21% U.S. federal rate.

For the year ended December 31, 2023, the Company recognized income tax expense greater than the expected federal rate of 21% primarily due to certain losses that are not deductible for tax purposes and tax expense related to cross-border taxes, partially offset by tax benefits related to foreign currency adjustments on certain U.K. deferred tax assets and earnings in foreign jurisdictions taxed at rates lower than the 21% U.S. federal rate.

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


	December 31,
	2025		2024

	amounts in millions
Deferred tax assets:
Tax loss and credit carryforwards	$	604	609
Other accrued liabilities		13	14
Accrued stock compensation		5	5
Intangible assets		—	8
Other future deductible amounts		3	—
Deferred tax assets		625	636
Valuation allowance		(28)	(10)
Net deferred tax assets		597	626
Deferred tax liabilities:
Intangible assets		625	—
Fixed assets		89	80
Investments		—	19
Other future taxable amounts		—	2
Deferred tax liabilities		714	101
Net deferred tax assets (liabilities)	$	(117)	525

During the year ended December 31, 2025, there was a $20 million increase in the Company’s valuation allowance that affected income tax expense and a $2 million decrease that affected equity.

At December 31, 2025, the Company had a deferred tax asset of $604 million for federal, state and foreign net operating losses (“NOLs”) and interest expense carryforwards. Of this amount, the Company has $33 million of federal NOLs, $43 million of federal interest expense carryforwards, $1 million of state NOLs, $261 million of foreign NOLs and $266 million of foreign interest expense carryforwards that may be carried forward indefinitely. These losses and interest carryforwards are expected to be utilized prior to expiration, except for $24 million of federal losses and interest carryforwards and $4 million of foreign losses and interest carryforwards, which, based on current projections, will not be utilized in the future and are subject to a valuation allowance.

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

As of December 31, 2025, the Company’s tax years prior to 2022 are closed for federal income tax purposes. The IRS has completed its examination of the Company’s 2022 tax year. However, 2022 remains open until the statute of limitations lapses on October 15, 2026. The Company’s 2023 and 2024 tax years are under examination by the IRS and remain open until the statute of limitations lapses on October 15, 2027 and 2028, respectively. The Company’s 2025 tax

year is currently under examination as part of the IRS Compliance Assurance Process program. Various states are currently examining the Company’s prior years’ state income tax returns.

- Definition

The entire disclosure for income tax.

+ References

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+ Details