v3.26.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The U.S. and foreign components of earnings (loss) from continuing operations before income taxes and equity in loss of investee companies were as follows:
SuccessorPredecessor
Period From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,
2025202520242023
United States$(652)$157 $(5,862)$(2,039)
Foreign176 347 (315)786 
Total$(476)$504 $(6,177)$(1,253)
The components of the (benefit from) provision for income taxes were as follows:
SuccessorPredecessor
Period From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,
2025202520242023
Current:
Federal$(11)$144 $121 $70 
State and local(5)74 56 84 
Foreign91 104 148 135 
Total current75 322 325 289 
Deferred:
Federal$(139)$(341)$(538)$(556)
State and local21 (73)(116)(110)
Foreign3 13 24 16 
Total deferred(115)(401)(630)(650)
Benefit from income taxes$(40)$(79)$(305)$(361)
In addition, for the Predecessor periods, net earnings from discontinued operations included income tax provisions of $5 million and $249 million for the years ended 2024 and 2023, respectively.

The equity in loss of investee companies is shown net of tax on the Consolidated Statements of Operations. The tax provision relating to losses from equity investments was $1 million for the period from August 7 - December 31, 2025 (Successor) and $2 million for the period from January 1 - August 6, 2025 (Predecessor), and the tax benefit was $1 million in 2024 and $10 million in 2023, which represented an effective tax rate of 1.0%, 1.2%, 0.3%, and 2.7% for the respective periods.
The difference between income taxes expected at the U.S. federal statutory income tax rate of 21% and the (benefit from) provision for income taxes is summarized as follows:
SuccessorPredecessor
Period From August 7 - December 31,Period From January 1 - August 6,
20252025
AmountPercentAmountPercent
Taxes on income at U.S. federal statutory rate$(100)21.0 %$106 21.0 %
State and local taxes, net of federal tax benefit (a)
6 (1.3)%(17)(3.4)%
Effect of foreign operations:
United Kingdom
Statutory tax rate difference6 (1.3)%7 1.4 %
UK consortium group relief(29)6.1 %(37)(7.3)%
Withholding taxes(4)0.8 %(5)(1.0)%
Provision to return(13)2.7 %— — %
Other2 (0.4)%7 1.4 %
Canada
Withholding taxes28 (5.9)%28 5.5 %
Other5 (1.0)%1 0.2 %
Netherlands
Provision to return16 (3.4)%— — %
Other— — %3 0.6 %
Australia
Statutory tax rate difference(3)0.6 %(6)(1.2)%
Changes in valuation allowances5 (1.0)%25 5.0 %
Other5 (1.0)%3 0.6 %
Germany
Provision to return6 (1.3)%1 0.2 %
Other— — %1 0.2 %
Chile
Changes in valuation allowances7 (1.5)%— — %
Other(2)0.4 %(1)(0.2)%
Barbados
Statutory tax rate difference(11)2.3 %(16)(3.2)%
Pillar Two14 (2.9)%— — %
Italy8 (1.7)%5 1.0 %
Other foreign jurisdictions17 (3.6)%21 4.2 %
Effect of cross-border tax laws:
Foreign tax credits(62)13.0 %(51)(10.1)%
Foreign-derived intangible income— — %(48)(9.5)%
U.S. tax on foreign entities— — %8 1.6 %
Subpart F income23 (4.8)%— — %
Tax credits— — %(4)(0.8)%
Changes in valuation allowances5 (1.0)%(94)(18.7)%
Nontaxable and nondeductible items
Compensation25 (5.2)%5 1.0 %
Noncontrolling interests(9)1.9 %(93)(18.5)%
Transaction-related items1 (0.2)%14 2.8 %
Excess tax (benefit) deficiency from stock-based compensation(2)0.4 %9 1.8 %
Other4 (0.8)%(4)(0.8)%
Changes in reserve for uncertain tax positions11 (2.3)%57 11.3 %
Other, net1 (0.2)%(4)(0.8)%
Benefit from income taxes$(40)8.4 %$(79)(15.7)%
(a) State taxes in Pennsylvania, New York, California, New Jersey, Ohio, and Oregon comprise the majority of the tax effect in this category.
Predecessor
Year Ended December 31,
20242023
Taxes on income at U.S. federal statutory rate$(1,297)$(263)
State and local taxes, net of federal tax benefit(56)(13)
Effect of foreign operations74 (97)
Noncontrolling interests(7)(6)
Goodwill impairment819 — 
Interest limitation carryforward valuation allowance101 — 
Non-deductible expenses55 9 
Reorganization of foreign operations— (4)
Tax deficiency from stock-based compensation18 18 
Other, net
(12)(5)
Benefit from income taxes$(305)$(361)
The following table summarizes the components of deferred income tax assets and liabilities.
SuccessorPredecessor
AtAt
December 31, 2025December 31, 2024
Deferred income tax assets:
Reserves and other accrued liabilities$606 $354 
Pension, postretirement and other employee benefits437 460 
Lease liability348 409 
Tax credit and loss carryforwards893 538 
Interest limitation carryforward13 114 
Capitalized costs383 180 
Intangible assets— 428 
Investments406 25 
Other5 10 
Total deferred income tax assets3,091 2,518 
Valuation allowance(625)(655)
Deferred income tax assets, net of valuation allowance2,466 1,863 
Deferred income tax liabilities:
Intangible assets(395)— 
Lease asset(308)(340)
Property, equipment and other assets(267)(89)
Financing obligations(285)(66)
Other(14)(16)
Total deferred income tax liabilities(1,269)(511)
Deferred income tax assets, net$1,197 $1,352 
At December 31, 2025 (Successor), we had deferred income tax assets for federal foreign tax credit carryforwards of $111 million and net operating loss carryforwards for federal, state and local, and foreign jurisdictions of $657 million, the majority of which expire in various years from 2026 through 2040. The deferred tax asset for the U.S. interest limitation carryforward of $13 million at December 31, 2025 (Successor) has an indefinite carryforward period.
The 2025 (Successor) and 2024 (Predecessor) deferred income tax assets were reduced by a valuation allowance of $625 million and $655 million, respectively, principally relating to income tax benefits from capital losses and net operating losses in foreign jurisdictions, which are not expected to be realized. On July 4, 2025, the U.S. government enacted tax legislation, which includes the extension of certain expired or expiring tax provisions, including a favorable change to the interest deduction limitation, and modifications to certain international tax provisions. The legislation has multiple effective dates with certain provisions effective in 2025. The favorable change to the interest deduction limitation resulted in the reversal of the valuation allowance of $114 million on our interest limitation carryforward deferred tax asset.

Generally, the future remittance of foreign undistributed earnings will not be subject to U.S. federal income taxes and as a result, for substantially all of our foreign subsidiaries, we do not intend to assert indefinite reinvestment of both cash held outside of the U.S. and future cash earnings. However, a future repatriation of cash could be subject to state and local income taxes, foreign income taxes, tax on foreign currency translation gains and losses, and withholding taxes. Accordingly, as of December 31, 2025 (Successor), we recorded deferred income tax liabilities associated with future repatriations of $10 million on the Consolidated Balance Sheet. Additional income taxes have not been provided for outside basis differences inherent in these entities, which could be recognized upon sale or other transaction, as these amounts continue to be indefinitely invested in foreign operations. The determination of the U.S. federal deferred income tax liability for such outside basis difference is not practicable.

The income taxes paid (net of refunds) were as follows:
SuccessorPredecessor
Period From August 7 - December 31,Period From January 1 - August 6,
20252025
Federal$— $196 
State and local:
Hawaii— (49)
Other19 9 
Foreign:
Canada14 (21)
Italy12 5 
United Kingdom2 17 
Other23 44 
Total$70 $201 
The following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.
At 1/1/2023 (Predecessor)$303 
Additions for current year tax positions15 
Additions for prior year tax positions20 
Reductions for prior year tax positions(46)
Cash settlements(2)
Statute of limitations lapses(4)
At December 31, 2023 (Predecessor)286 
Additions for current year tax positions12 
Additions for prior year tax positions3 
Reductions for prior year tax positions(14)
Cash settlements(3)
Statute of limitations lapses(4)
At December 31, 2024 (Predecessor)280 
Additions for current year tax positions6 
Additions for prior year tax positions154 
Reductions for prior year tax positions(8)
Statute of limitations lapses(1)
At August 6, 2025 (Predecessor)431 
Additions for current year tax positions3 
Additions for prior year tax positions2 
Reductions for prior year tax positions(3)
Cash settlements(1)
Statute of limitations lapses(1)
At December 31, 2025 (Successor)$431 
The reserve for uncertain tax positions of $431 million at December 31, 2025 (Successor) includes $360 million which would affect our effective income tax rate, if and when recognized in future years. We recognized interest and penalties of $13 million for the Successor period from August 7 - December 31, 2025, and $33 million, $28 million, and $26 million for the Predecessor periods from January 1 - August 6, 2025 and the years ended December 31, 2024 and 2023, respectively, in the Consolidated Statements of Operations. Liabilities for accrued interest and penalties totaling $144 million as of December 31, 2025 (Successor) and $104 million as of December 31, 2024 (Predecessor), respectively, are included within “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets.
The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and local and foreign jurisdictions. For periods prior to the 2019 merger of Viacom and CBS, Viacom and CBS filed separate tax returns. For Viacom, we are currently under examination by the IRS for the 2016 through 2019 tax years. The Company and the IRS settled CBS’ income tax audits for the 2017 and 2018 tax years in 2023 and, during the Predecessor period from January 1 - August 6, 2025, settled the merged company’s 2019 income tax audit. In both audits, one item remains open and is currently being resolved through the Mutual Agreement Procedure process. Various tax years are also currently under examination by state and local and foreign tax authorities.