Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our for the three months ended September 30, 2026 was 623.6% (income tax benefit of $652.3 million), which differs from the Bermuda statutory rate of 15.0% (expected income tax benefit of $15.7 million). This difference is primarily due to the positive impact of the release of valuation allowances in the Netherlands of $709.3 million (678.1%), as explained below. Our effective tax rate for the nine months ended September 30, 2026 was (483.1%) (income tax benefit of $454.1 million), which differs from the Bermuda statutory rate of 15.0% (expected income tax expense of $14.1 million). This difference is primarily due to the positive impact of the release of valuation allowances in the Netherlands of $709.3 million (754.6%), as explained below. The positive impact of this item was partially offset by the negative impact of the derecognition of a tax litigation-related receivable in the U.S. of $133.3 million (141.8%). Our effective tax rate for the three months ended September 30, 2025 was 36.0% (income tax benefit of $46.9 million), which differs from the Bermuda statutory rate of 15.0% (expected income tax benefit of $19.6 million). This difference is primarily due to the positive impacts of (i) a net decrease in unrecognized tax benefits of $46.4 million (35.6%) and (ii) statutory rates in certain jurisdictions in which we operate that are different than the Bermuda statutory rate, including $14.5 million (11.1%) in the U.K. The positive impacts of these items were partially offset by the negative impacts of (a) a net increase in valuation allowances in the U.K. of $23.0 million (17.7%) and (b) non-deductible net income from certain investments in the U.K. and the Netherlands of $9.2 million (7.1%). Our effective tax rate for the nine months ended September 30, 2025 was 2.7% (income tax benefit of $116.0 million), which differs from the Bermuda statutory rate of 15.0% (expected income tax benefit of $644.5 million). This difference is primarily due to the negative impacts of (i) non-deductible net foreign currency exchange losses in the U.K. of $899.9 million (20.9%) and (ii) non-deductible net losses from certain investments in the U.K. and the Netherlands of $122.0 million (2.8%). The negative impacts of these items were partially offset by the positive impacts of (a) statutory rates in certain jurisdictions in which we operate that are different than the Bermuda statutory rate, including $406.8 million (9.5%) in the U.K., and (b) the release of valuation allowances in Luxembourg of $86.0 million (2.0%). During the third quarter of 2026, we released the valuation allowance previously recorded against certain deferred tax assets in the Netherlands. This release was primarily driven by changes in our assessment of the realizability of tax loss carryforwards following the acquisition of VodafoneZiggo and the inclusion of VodafoneZiggo entities within the Ziggo Group fiscal unity for Dutch tax purposes. The amount of the release reflects management’s updated assessment of the portion of the deferred tax assets that is more likely than not to be realized. On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was enacted in the U.S., introducing various changes to federal tax law. We have evaluated the provisions of the OBBBA and determined that they did not have a material impact on our consolidated financial statements through September 30, 2026, nor do we currently anticipate that the OBBBA will have a material impact on our consolidated financial statements in the future. As of September 30, 2026, our unrecognized tax benefits were $151.4 million, of which $92.1 million would have a favorable impact on our effective income tax rate if ultimately recognized, after considering amounts that we would expect to be offset by valuation allowances and other factors. We and our subsidiaries file consolidated and standalone income tax returns in various jurisdictions. In the normal course of business, our income tax filings are subject to review by various taxing authorities. In connection with such reviews, disputes could arise with the taxing authorities over the interpretation or application of certain income tax rules related to our business in that tax jurisdiction. Such disputes may result in future tax and interest and penalty assessments by these taxing authorities. The ultimate resolution of tax contingencies will take place upon the earlier of (i) the settlement date with the applicable tax authorities in either cash or agreement of income tax positions or (ii) the date when the tax authorities are statutorily prohibited from adjusting the company’s tax computations. In general, tax returns filed by our company or our subsidiaries for years prior to 2019 are no longer subject to examination by tax authorities. Certain of our subsidiaries are currently involved in income tax examinations in various jurisdictions in which we operate, including Belgium, Luxembourg and the U.S. While we do not expect adjustments from the foregoing examinations to have a material impact on our consolidated financial position, results of operations or cash flows, no assurance can be given that this will be the case given the amounts involved and the complex nature of the related issues. On October 7, 2022, the U.S. Department of Justice (DOJ) filed a suit against Liberty Global, Inc. (LGI), a wholly-owned U.S. subsidiary of Liberty Global, in the U.S. District Court of Colorado (the District Court) for unpaid federal income taxes and penalties for the 2018 tax year of approximately $284 million. This action by the DOJ is related to the November 2020 complaint filed by LGI in the District Court seeking a refund of approximately $110 million of taxes, penalties and interest associated with the application of certain temporary Treasury regulations issued in June 2019. In October 2023, the District Court entered judgment against LGI with respect to the refund claim and we appealed this decision to the U.S. Court of Appeals for the Tenth Circuit (the Court of Appeals) in December 2023. In April 2026, the Court of Appeals upheld the District Court’s decision with respect to the refund claim. As a result of the adverse appellate ruling, we concluded that the realization of the refund is no longer probable; therefore, in the first quarter of 2026, we derecognized the associated receivable. In August 2026, the Court of Appeals denied our petition for en banc review. We intend to file a petition for a writ of certiorari with the U.S. Supreme Court. As it pertains to the suit filed by the DOJ in 2022, we will continue our defense of certain matters not specifically addressed in the decision by the Court of Appeals.
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