Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

11. INCOME TAXES

The components of income (loss) before provision for income taxes for the years ended December 31, 2021, 2020 and 2019 (in millions):

	2021		2020			2019
Domestic	$	35.9	$	2.0		$	(0.4	)
Foreign		18.0		(1.9	)		(10.9	)
Income (loss) before provision for income taxes	$	53.9	$	0.1		$	(11.3	)

The provision (benefit) for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 (in millions):

	2021			2020			2019
Current
Federal	$	1.8		$	1.2		$	(0.1	)
State		1.9			(1.2	)		9.4
Foreign		7.4			1.5			1.9
	$	11.1		$	1.5		$	11.2
Deferred
Federal	$	9.6		$	0.8		$	2.9
State		0.4			(1.0	)		(4.0	)
Foreign		(2.4	)		0.2			(1.9	)
		7.6			-			(3.0	)
Total provision for taxes	$	18.7		$	1.5		$	8.2

The income tax provision (benefit) differs from the amount of income tax determined by applying the Company’s federal corporate income tax rate of 21% to pre-tax income for the years ended December 31, 2021, 2020 and 2019 due to the following (in millions):

	2021			2020			2019
Computed “expected” tax provision (benefit)	$	11.3		$	-		$	(2.4	)
Change in income tax resulting from:
State taxes, net of federal benefit		1.9			0.7			1.0
Change in fair value of earnout		2.7			-			(1.6	)
Non-deductible executive compensation		1.2			0.4			0.3
Non-deductible expenses		0.2			0.2			0.3
Foreign income		4.1			0.1			0.2
Foreign Permanent Differences including GAAP to Statutory Differences		2.8			-			-
Foreign Non-Territorial Income		(6.9	)		-			-
State tax impact of previously deferred gain from FCC auction for broadcast spectrum		-			(2.5	)		2.7
Transaction costs		0.2			0.1			-
Change in valuation allowance		0.2			1.7			-
Change in state tax rate		(0.1	)		0.5			0.4
Stock compensation		(0.8	)		0.2			0.4
Change in unrecognized tax benefits		(0.3	)		0.1			0.7
Impairment		-			0.2			6.3
Other		2.2			(0.2	)		(0.1	)
	$	18.7		$	1.5		$	8.2

The components of the deferred tax assets and liabilities at December 31, 2021 and 2020 consist of the following (in millions):

		2021			2020
Deferred tax assets:
Accrued expenses	$	1.9		$	1.9
Accounts receivable		1.5			1.0
Net operating loss carryforward		4.8			16.4
Stock-based compensation		1.4			1.1
Credits		-			0.1
Lease obligations		7.2			10.1
Other comprehensive income		0.4			0.4
Other		1.1			0.6
Total deferred tax assets		18.3			31.6
Valuation allowance		(1.9	)		(1.7	)
Net deferred tax assets	$	16.4		$	29.9
Deferred tax liabilities:
Intangible assets	$	(70.3	)	$	(69.1	)
Property and equipment		(5.9	)		(7.2	)
Lease assets		(6.4	)		(8.4	)
Other		(0.5	)		(0.2	)
Total deferred tax liabilities		(83.1	)		(84.9	)
Net deferred tax liabilities	$	(66.7	)	$	(55.0	)

As of December 31, 2021, the Company has state and foreign net operating loss carryforwards of approximately $44.7 million, and $8.6 million, respectively, available to offset future taxable income. The state net operating loss carryforwards will expire during the years 2028 through 2038, to the extent they are not utilized. The foreign net operating loss carryforwards will expire during the years 2026 through 2036 in various jurisdictions, In various other jurisdiction, net operating loss carryforwards do not expire.

Utilization of the Company’s state net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code or similar state provisions. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2021, the Company believes that utilization of its state net operating losses are not limited under any ownership change limitations provided under the Internal Revenue Code or under similar state statutes.

Due to the enactment of Tax Cuts and Jobs Act (“the Tax Act”) in December 2017, the Company is subject to a tax on global intangible low-taxed income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences including outside basis differences expected to reverse as GILTI. The Company has elected to account for GILTI as a period cost, and therefore has included GILTI expense in its effective tax rate calculation for the period.

The Company periodically evaluates the realizability of the deferred tax assets and, if it is determined that it is more likely than not that the deferred tax assets are realizable, adjusts the valuation allowance accordingly. Valuation allowances are established and maintained for deferred tax assets on a “more likely than not” threshold. The process of evaluating the need to maintain a valuation allowance for deferred tax assets is highly subjective and requires significant judgment. The Company has considered the following possible sources of taxable income when assessing the realization of the deferred tax assets: (1) future reversals of existing taxable temporary differences; (2) taxable income in prior carryback years; (3) future taxable income exclusive of reversing temporary differences and carryforwards; and (4) tax planning strategies. Based on the Company’s analysis and a review of all positive and negative evidence such as historical operations, future projections of taxable income and tax planning strategies that are prudent and feasible, the Company determined that it was more likely than not that its deferred tax assets would be realized for all jurisdictions with the exception of the Company’s digital operations located in Spain, Paraguay and Mexico. As a result of recurring losses from the digital operations in Spain, Paraguay and Mexico, the Company has determined that it is more likely than not that deferred tax assets of approximately $1.9 million at December 31, 2021 will not be realized and therefore the Company has established a valuation allowance on those assets.

The Company addresses uncertainty in tax positions according to the provisions of ASC 740, “Income Taxes”, which clarifies the accounting for income taxes by establishing the minimum recognition threshold and a measurement attribute for tax positions taken or expected to be taken in a tax return in order to be recognized in the financial statements.

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions):

	Amount
Balance at December 31, 2019	$	6.7
Lapse of statute		(0.4	)
Interest accrued		0.1
Decrease in balances related to prior year tax positions		(2.1	)
Balance at December 31, 2020	$	4.3
Lapse of statute		(3.6	)
Interest accrued		0.1
Increase in balances related to prior year tax positions		2.4
Balance at December 31, 2021	$	3.2

As of December 31, 2021, the Company had $3.2 million of gross unrecognized tax benefits for uncertain tax positions, of which $1.0 million would affect the effective tax rate if recognized.

As of December 31, 2021, the Company does not anticipates that the amount of unrecognized tax benefits to decrease within the next 12 months.

The Company recognizes interest and penalties related to income tax matters as a component of income tax expense. As of December 31, 2021, the Company had $0.1 million of accrued interest and penalties related to uncertain tax positions.

The Company is subject to taxation in the United States, various states, and various foreign jurisdictions. The tax years 2018 to 2020 and 2017 to 2020 remain open to examination by federal and state taxing jurisdictions, respectively. For foreign jurisdictions, the tax years 2008 to 2020 may remain open to examination by certain foreign jurisdictions.

The Company intends to indefinitely reinvest its unremitted earnings in its foreign subsidiaries, and accordingly has not provided deferred tax liabilities on those earnings. The Company has not determined at this time an estimate of total amount of unremitted earnings, as it is not practical at this time.