(10) Income Taxes

Income tax benefit (expense) consists of:

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Income tax benefit (expense) differs from the amounts computed by applying the applicable U.S. federal income tax rate of 21%as a result of the following:

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For the year ended December 31, 2021, the significant reconciling items, as noted in the table above, are primarily due to a non-deductible litigation settlement and non-deductible executive compensation, partially offset by tax benefits from a change in effective tax rate used to measure deferred taxes on certain Charter shares.

For the year ended December 31, 2020, the significant reconciling item, as noted in the table above, is primarily the result of a change in the effective state tax rate used to measure deferred taxes due to the Combination.

For the year ended December 31, 2019, the significant reconciling item, as noted in the table above, is the result of state income taxes.

The tax effects of temporary differences and tax attributes that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below:

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The Company’s valuation allowance decreased $5 million in 2021, of which $4 million affected tax expense and $1 million affected equity.

At December 31, 2021, Liberty Broadband had a deferred tax assets of $96 million for federal and state net operating losses, capital loss carryforwards, interest expense carryforwards and tax credit carryforwards. Of the $96 million, $31 million are carryforwards with no expiration. The remaining carryforwards expire at certain future dates. These carryforwards are expected to be utilized prior to expiration, except for $7 million which based on current projections, may expire unused and accordingly are subject to a valuation allowance. The carryforwards that are expected to be utilized begin to expire in 2022.

As of December 31, 2021, the Company had not recorded tax reserves related to unrecognized tax benefits for uncertain tax positions.

As of December 31, 2021, the IRS has completed its examination of Liberty Broadband’s 2018 and 2019 tax years. Because Liberty Broadband’s ownership of Charter is less than the required 80%, Charter is not consolidated with Liberty Broadband for federal income tax purposes. As of December 31, 2021, there are no GCI Liberty tax years under IRS examination. Prior to the March 9, 2018 GCI Liberty split-off from Qurate Retail, certain GCI Liberty businesses were part of the Qurate Retail, Inc. consolidated federal tax group. The IRS has completed its examinations of Qurate Retail’s 2018 tax year. Various states are currently examining Qurate’s prior years’ state income tax returns.

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