The provision for federal and foreign income tax expense for continuing operations of Holdings consisted of the following:


	Year Ended December 31,
	2022			2023		2024
(Loss) income before income taxes:
U.S.	$	(286.9	)	$	151.4	$	173.3
Foreign		21.9			70.0		79.5
Total	$	(265.0	)	$	221.4	$	252.8

Current and deferred income taxes for Holdings were as follows:


	Year Ended December 31,
	2022			2023			2024
Current:
Federal	$	1.9		$	2.2		$	29.9
Foreign		9.2			14.2			15.2
State		1.2			2.9			5.6
Total current expense		12.3			19.3			50.7
Deferred:
Federal	$	(2.7	)	$	15.8		$	(19.9	)
Foreign		(2.4	)		(5.7	)	$	(36.0	)
State		(4.2	)		0.5		$	(54.9	)
Total deferred taxes		(9.3	)		10.6			(110.8	)
Income taxes	$	3.0		$	29.9		$	(60.1	)

A reconciliation between Holdings’ income tax expense and taxes computed by applying the applicable statutory federal income tax rate to (loss) income before income taxes is as follows:


	Year Ended December 31,
	2022			2023			2024
Computed statutory tax expense	$	(55.7	)	$	46.5		$	53.1
State and local income taxes, net of federal income tax impact		(2.2	)		5.4			7.7
Changes in valuation allowance		60.6			(63.9	)		(136.7	)
Foreign tax rate differential		1.3			1.4			—
Foreign tax credits		(4.0	)		(13.0	)		(4.9	)
Inflation adjustments		(1.1	)		(0.3	)		(6.1	)
Nondeductible compensation		1.4			2.9			3.9
Changes in uncertain tax positions		1.6			(0.9	)		3.1
U.S. tax impact of foreign operations		(1.6	)		10.3			9.6
Return to provision		1.4			(3.3	)		1.4
Expiration of attribute carryforwards		—			37.1			3.1
Permanent differences		4.4			6.8			7.4
Other, net		(3.1	)		0.9			(1.7	)
Income taxes	$	3.0		$	29.9		$	(60.1	)

The provision for federal and foreign income tax expense for continuing operations of CUSA consisted of the following:


	Year Ended December 31,
	2022			2023		2024
(Loss) income before income taxes:
U.S.	$	(263.7	)	$	167.0	$	188.8
Foreign		21.9			70.0		79.5
Total	$	(241.8	)	$	237.0	$	268.3

Current and deferred income taxes for CUSA were as follows:


	Year Ended December 31,
	2022			2023			2024
Current:
Federal	$	1.9		$	2.8		$	29.5
Foreign		9.2			14.2			15.2
State		1.2			2.9			6.6
Total current expense		12.3			19.9			51.3
Deferred:
Federal	$	(16.2	)	$	13.8		$	(20.3	)
Foreign		(2.4	)		(5.7	)		(36.0	)
State		(6.8	)		0.4			(50.8	)
Total deferred taxes		(25.4	)		8.5			(107.1	)
Income taxes	$	(13.1	)	$	28.4		$	(55.8	)

A reconciliation between CUSA’s income tax expense and taxes computed by applying the applicable statutory federal income tax rate to (loss) income before income taxes is as follows:


	Year Ended December 31,
	2022			2023			2024
Computed statutory tax expense	$	(50.8	)	$	49.8		$	56.3
State and local income taxes, net of federal income tax impact		(4.2	)		5.9			8.1
Changes in valuation allowance		41.8			(68.6	)		(134.8	)
Foreign tax rate differential		1.3			1.4			—
Foreign tax credits		(4.0	)		(12.9	)		(5.9	)
Inflation adjustments		(1.1	)		(0.3	)		(6.1	)
Nondeductible compensation		1.4			2.8			3.9
Changes in uncertain tax positions		1.6			(0.9	)		3.2
U.S. tax impact of foreign operations		(1.6	)		10.4			9.4
Return to provision		1.2			(3.3	)		1.1
Expiration of attribute carryforwards		—			36.4			3.2
Permanent differences		4.4			6.9			7.4
Other, net		(3.1	)		0.8			(1.6	)
Income taxes	$	(13.1	)	$	28.4		$	(55.8	)

As of December 31, 2024, the Company is not indefinitely reinvested with respect to $6.3 of accumulated undistributed earnings of its Curacao and Brazilian subsidiaries. As of December 31, 2024, the Company had approximately $199.7 of accumulated undistributed earnings and profits which it considers to be indefinitely reinvested. Of this indefinitely reinvested amount, approximately $159.3 was subject to the one-time transition tax pursuant to the 2017 Tax Cuts and Jobs Act. Additional tax due on the repatriation of these previously-taxed earnings would generally be foreign withholding and U.S. state income taxes. The Company does not intend to repatriate these offshore earnings and profits, and therefore has not recorded any deferred taxes on such earnings. The Company considers any excess of the amount for financial reporting over the tax basis of its investment in these foreign subsidiaries to be indefinitely reinvested. At this time, the determination of deferred tax liabilities on this amount is not practicable.

The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities for Holdings as of the periods presented consisted of the following:


	December 31,
	2023			2024
Deferred liabilities:
Theater properties and equipment	$	68.4		$	56.7
Finance lease assets		13.3			22.4
Operating lease right-of-use assets		248.8			232.6
Intangible asset – other		55.8			57.4
Intangible asset – tradenames		69.5			69.5
Total deferred liabilities		455.8			438.6
Deferred assets:
Deferred revenue – NCM and Other		82.2			83.0
Gift cards		9.7			10.8
Operating lease obligations		269.0			249.0
Finance lease obligations		18.6			27.9
Tax impact of items in accumulated other comprehensive income and additional paid-in-capital		13.4			10.3
Restricted stock		4.5			6.1
Other tax loss carryforwards		82.7			65.8
Other tax credit and attribute carryforwards		179.3			167.9
Other expenses, not currently deductible for tax purposes		18.7			13.6
Total deferred assets		678.1			634.4
Net deferred income tax asset before valuation allowance		(222.3	)		(195.8	)
Valuation allowance against deferred assets – non-current		266.3			129.5
Net deferred income tax liability (asset)	$	44.0		$	(66.3	)
Net deferred tax asset – Foreign	$	(0.1	)	$	(32.4	)
Net deferred tax liability (asset) – U.S.		44.1			(33.9	)
Total	$	44.0		$	(66.3	)

The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities for CUSA as of the periods presented consisted of the following:


	December 31,
	2023			2024
Deferred liabilities:
Theater properties and equipment	$	68.2		$	56.6
Finance lease assets		13.2			22.4
Operating lease right-of-use assets		248.1			232.3
Intangible asset – other		55.7			57.3
Intangible asset – tradenames		69.3			69.4
Tax impact of items in accumulated other comprehensive income and additional paid-in-capital		1.4			—
Total deferred liabilities		455.9			438.0
Deferred assets:
Deferred revenue – NCM and Other		82.0			82.8
Gift Cards		9.7			10.8
Operating lease obligations		268.3			248.7
Finance lease obligations		18.6			27.9
Tax impact of items in accumulated other comprehensive income and additional paid-in-capital		—			3.5
Restricted stock		4.3			5.9
Other tax loss carryforwards		80.0			63.1
Other tax credit and attribute carryforwards		149.0			128.1
Other expenses, not currently deductible for tax purposes		18.5			13.5
Total deferred assets		630.4			584.3
Net deferred income tax asset before valuation allowance		(174.5	)		(146.3	)
Valuation allowance against deferred assets – non-current		218.5			83.7
Net deferred income tax liability (asset)	$	44.0		$	(62.6	)
Net deferred tax asset – Foreign	$	(0.1	)	$	(32.4	)
Net deferred tax liability (asset) – U.S.		44.1			(30.2	)
Total	$	44.0		$	(62.6	)

Federal interest expense limitation carryforwards have an indefinite carryforward period. Foreign net operating losses have varying carryforward periods with some being indefinite. Similarly, state net operating losses have varying carryforward periods with some being indefinite. Foreign tax credits have a 10- year carryforward period. A majority of the Company’s foreign tax credit carryforwards expire in 2026 and 2027, with the remainder expiring in future periods.

The Company assesses the likelihood that it will be able to recover its deferred tax assets against future sources of taxable income and reduces the carrying amounts of deferred tax assets by recording a valuation allowance, if, based on all available evidence, the Company believes it is more likely than not that all or a portion of such assets will not be realized. In 2024, the Company considered the achievement of sustained profitability and cumulative income as well as future projected earnings to be significant forms of positive evidence. The Company determined that the positive evidence outweighed the negative evidence and supported a release of a portion of the valuation allowance.

The Company’s valuation allowance changed from $266.3 as of December 31, 2023 to $129.5 as of December 31, 2024. The decrease primarily relates to a $100.9 release of domestic valuation allowances consisting of $29.4 related to certain foreign tax credits, $34.5 related to certain state net operating losses, and $37.0 related to other federal and state deferred tax assets, as well as a $36.5 release of valuation allowances in certain foreign jurisdictions. CUSA’s valuation allowance changed from $218.5 as of December 31, 2023 to $83.7 as of December 31, 2024. The decrease primarily relates to a $95.2 release of domestic valuation allowances consisting of $27.4 related

to certain foreign tax credits, $30.8 related to certain state net operating losses, and $37.0 related to other federal and state deferred tax assets, as well as a $36.5 release of valuation allowances in certain foreign jurisdictions.

The Company maintains a valuation allowance against certain deferred tax assets for which the ultimate realization of future benefits is uncertain. Expiring carryforwards and the required valuation allowances are adjusted annually. After application of the valuation allowances described above, the Company anticipates that no limitations will apply with respect to utilization of any of the other deferred tax assets described above. The remaining valuation allowance primarily relates to interest expense carryforwards, foreign tax credits, and certain state net operating losses.

Holdings’ valuation allowance for deferred tax assets, which includes CUSA’s valuation allowance for deferred tax assets, and CUSA’s valuation allowance for deferred tax assets, for the periods presented were as follows:


	Valuation Allowance for Deferred Taxes
	Holdings			CUSA
Balance at January 1, 2022	$	264.1		$	240.9
Additions		67.0			47.0
Deductions		(5.3	)		(4.9	)
Currency translation		0.3			0.2
Balance at December 31, 2022	$	326.1		$	283.2
Additions		16.6			5.9
Deductions		(83.0	)		(77.2	)
Currency translation		6.6			6.6
Balance at December 31, 2023	$	266.3		$	218.5
Additions		7.9			4.2
Deductions		(137.4	)		(131.7	)
Currency translation		(7.3	)		(7.3	)
Balance at December 31, 2024	$	129.5		$	83.7

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for Holdings for the periods presented:


	Year Ended December 31,
	2022			2023			2024
Balance at January 1,	$	55.9		$	55.8		$	52.9
Gross increases - tax positions in prior periods		—			2.2			0.4
Gross decreases - tax positions in prior periods		(0.2	)		(5.1	)		—
Gross increases - current period tax positions		0.1			0.2			0.7
Statute of limitations expiration		—			(0.2	)		—
Balance at December 31,	$	55.8		$	52.9		$	54.0

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties for CUSA for the periods presented:


	Year Ended December 31,
	2022			2023			2024
Balance at January 1,	$	54.0		$	53.9		$	51.0
Gross increases - tax positions in prior periods		—			2.2			0.5
Gross decreases - tax positions in prior periods		(0.2	)		(5.1	)		—
Gross increases - current period tax positions		0.1			0.2			0.7
Statute of limitations expiration		—			(0.2	)		—
Balance at December 31,	$	53.9		$	51.0		$	52.2

Holdings had $64.1 and $68.3 of unrecognized tax benefits, including interest and penalties, as of December 31, 2023 and 2024, respectively. Of these amounts, $64.1 and $68.3 represent the amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate for the years ended December 31, 2023 and 2024, respectively. CUSA had $62.2 and $66.4 of unrecognized tax benefits, including interest and penalties, as of December 31, 2023 and 2024, respectively. Of these amounts, $62.2 and $66.4 represent the amount of unrecognized

tax benefits that, if recognized, would impact the effective income tax rate for the years ended December 31, 2023 and 2024, respectively. Holdings and CUSA had $11.1 and $14.3 accrued for interest and penalties as of December 31, 2023 and 2024, respectively. The Company believes it is reasonably possible that its existing unrecognized tax benefits may be reduced by an amount up to $35.9 within the next 12 months as a result of resolution of examination with taxing authorities.

The Company prepares and files income tax returns based upon its interpretation of tax laws and regulations and record estimates based upon these judgments and interpretations. In the normal course of business, the Company’s income tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law resulting from legislation, regulation, and/or as concluded through the various jurisdictions' tax court systems. Significant judgment is exercised in applying complex tax laws and regulations across multiple global jurisdictions where we conduct our operations. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based upon the technical merits of the position.

The Company is no longer subject to income tax audits from the Internal Revenue Service for years before 2018. The Company is no longer subject to state income tax examinations by tax authorities in its major state jurisdictions for years before 2020. The Company is no longer subject to non-U.S. income tax examinations by tax authorities in its major non-U.S. tax jurisdictions for years before 2008.

The Company is currently under IRS audit for tax years 2019 and 2020 and is under audit in the non-U.S. tax jurisdiction of Brazil. On October 21, 2024, the IRS issued a Revenue Agent Report (“RAR”) proposing an income tax adjustment of approximately $96.8 before interest and penalties related to positions reported in each year. The Company firmly disagrees with the conclusions presented by the IRS and believes the positions reported on its tax returns that have not been reserved for are more likely than not to prevail on technical merits. The Company intends to vigorously defend its reported positions through the applicable IRS administrative and judicial procedures, as appropriate. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations such as this to determine the adequacy of the Company’s tax reserves. Currently, the Company believes it is adequately reserved for these matters. The ultimate outcome of disputes of this nature is uncertain and there can be no assurance that the dispute with the IRS will be resolved favorably.