Company: EVC
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034661
Chunk: 135

Company: ENTRAVISION COMMUNICATIONS CORP
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 135
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 in the expiration of the net operating loss carryforwards before utilization. As of December 31, 2024, the Company believes that utilization of its federal and state net operating losses are not limited under any ownership change limitations provided under the 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 has determined that it is more likely than not that certain foreign deferred tax assets of approximately $1.1

F-31

 million at December 31, 2024 will not be realized and therefore the Company has established a valuation allowance on those assets.  In addition, the Company has a capital loss generated from the sale of subsidiaries during 2024.  The Company has determined that it is more likely than not that its capital loss generated of $11.9 million will not be utilized and accordingly has recorded a valuation allowance of $11.9 million.  In addition, the Company has determined that it