The following table presents a summary of our domestic and foreign income (loss) before income taxes for the periods presented:


	Year Ended December 31,
	2024		2023		2022
	(in millions)
Domestic	$	61	$	95	$	37
Foreign		26		30		30
Income (loss) before income taxes	$	87	$	125	$	67

The components of our provision (benefit) for income taxes consisted of the following for the periods presented:


	Year Ended December 31,
	2024			2023			2022
	(in millions)
Current income tax expense (benefit):
Federal	$	129		$	94		$	37
State		29			25			3
Foreign		(62	)		21			26
Current income tax expense (benefit)		96			140			66
Deferred income tax expense (benefit):
Federal		(13	)		(9	)		(19	)
State		2			6			1
Foreign		(3	)		(22	)		(1	)
Deferred income tax expense (benefit)		(14	)		(25	)		(19	)
Provision (benefit) for income taxes	$	82		$	115		$	47

The significant components of our deferred tax assets and deferred tax liabilities consisted of the following as of the dates presented:


	December 31,
	2024			2023
	(in millions)
Deferred tax assets:
Stock-based compensation	$	9		$	14
Net operating loss carryforwards		93			96
Provision for accrued expenses		10			8
Lease financing obligation		12			13
Foreign advertising spend		13			14
Tax credit carryforward		8			10
Capitalized research expenses		71			52
Interest carryforward		40			32
Other		8			14
Total deferred tax assets	$	264		$	253
Less: valuation allowance		(106	)		(106	)
Net deferred tax assets	$	158		$	147
Deferred tax liabilities:
Intangible assets	$	(42	)	$	(42	)
Property and equipment		(2	)		(3	)
Prepaid expenses		(3	)		(4	)
Building - corporate headquarters		(10	)		(12	)
Other		(1	)		(1	)
Total deferred tax liabilities	$	(58	)	$	(62	)
Net deferred tax asset (liability)	$	100		$	85

At December 31, 2024, we had U.S. federal, state, and foreign net operating loss carryforwards (“NOLs”) of approximately $2 million, $49 million, and $354 million, respectively. U.S. federal NOLs of $2 million expire at various times starting from 2029. State NOLs of $9 million may be carried forward indefinitely, while the remaining state NOLs of $40 million expire at various times starting from 2030. Foreign NOLs of $342 million may be carried forward indefinitely, while the remaining foreign NOLs of $12 million expire at various times starting from 2025.

As of December 31, 2024, we had a valuation allowance of approximately $106 million related to certain foreign NOLs carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized.

Except for such foreign NOLs and other foreign deferred tax assets, discussed above, we expect to realize all of our deferred tax assets. Due to economic uncertainty and global inflationary pressures, we will continue to monitor our financial performance to determine if the valuation allowance against our deferred tax assets may be necessary in the future.

A reconciliation of the provision (benefit) for income taxes to the amounts computed by applying the statutory federal income tax rate to income (loss) before income taxes is as follows for the periods presented:


	Year Ended December 31,
	2024			2023			2022
	(in millions)
Income tax expense at the federal statutory rate	$	18		$	26		$	14
State income taxes, net of effect of federal tax benefit		5			6			5
Unrecognized tax benefits and related interest		4			27			17
IRS audit settlements		42			31			—
Additional IRS audit impacts (1)		6			—			—
Transfer pricing reserve adjustment		(4	)		24			—
FDII, GILTI and other provisions		(7	)		(9	)		(2	)
Research tax credit		(6	)		(4	)		(2	)
Stock-based compensation		15			22			11
Change in valuation allowance		(1	)		(6	)		5
Executive compensation		4			2			1
Other, net		6			(4	)		(2	)
Provision (benefit) for income taxes	$	82		$	115		$	47

(1)

Amount relates to incremental interest associated with the 2009 through 2011 tax years IRS audit period with Expedia. See below for further information regarding this IRS audit settlement.

Due to the one-time transition tax on the deemed repatriation of undistributed foreign subsidiary earnings and profits in 2017, the majority of previously unremitted earnings have been subjected to U.S. federal income tax. To the extent future distributions from these subsidiaries will be taxable, a deferred tax liability has been accrued which was not material as of December 31, 2024. As of December 31, 2024, $582 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested.

Tripadvisor continues to be subject to certain post Spin-Off obligations under the Tax Sharing Agreement, whereby Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Spin-Off to the extent such amounts resulted from (i) any act or failure to act by Tripadvisor described in the covenants in the tax sharing agreement, (ii) any acquisition of Tripadvisor equity securities or assets or those of a member of the Tripadvisor group; or (iii) any failure of the representations with respect to Tripadvisor or any member of our group to be true or any breach by Tripadvisor or any member of the Tripadvisor group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel.

We are currently under examination by the IRS for the 2018 tax year and have various ongoing audits for foreign and state income tax returns. These examinations may lead to proposed or ordinary course adjustments to our taxes. We are no longer subject to tax examinations by tax authorities for years prior to 2018. As of December 31, 2024, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia, our 2014 through 2016 standalone IRS audit, and our 2012 through 2016 HM Revenue & Customs (“HMRC”) audit.

As previously disclosed, we received Notices of Proposed Adjustments ("NOPA") from the IRS for the 2014 through 2016 tax years relating to certain transfer pricing arrangements with our foreign subsidiaries. In response, we requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for the 2014 through 2016 tax years. In January 2024, we received notification of a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024. During the year ended December 31, 2024, we recorded an income tax expense of $42 million, inclusive of interest, related to this settlement on our consolidated statement of operations and during the first quarter of 2024, we reviewed the impact of the acceptance of this settlement to our existing transfer pricing income tax reserves for the subsequent open tax years, which resulted in an income tax benefit, inclusive of estimated interest, of $4 million. Additionally, in connection with this IRS audit settlement: (i) during the second quarter of 2024, we made a payment to the IRS of $141 million, inclusive of estimated interest,

(ii) during the second half of 2024, we made various state tax payments totaling $26 million, inclusive of estimated interest, and (iii) during the fourth quarter of 2024, we received a competent authority refund of $42 million, inclusive of net interest income, from a foreign jurisdiction. This IRS audit settlement resulted in total net operating cash outflow during 2024 of $105 million, which includes federal tax benefits from these payments of $20 million. As of December 31, 2024, there are no remaining outstanding payments or refunds due related to this IRS audit settlement.

As of December 31, 2023, we had recorded $153 million of unrecognized tax benefits, inclusive of interest, classified as other long-term liabilities on our consolidated balance sheet. As a result of our acceptance of the MAP resolution agreement with the IRS for the 2014 through 2016 tax years, and its impact on other ongoing IRS audits, as described above, we reduced this unrecognized tax benefits liability by $79 million during the first quarter of 2024 by reclassifying the balance to current income taxes payable, representing a short-term payment obligation to the IRS, which was subsequently paid during the second quarter of 2024, as noted above.

In addition, as previously disclosed, we received a NOPA from the IRS for the 2009 through 2011 tax years relating to certain transfer pricing arrangements with our foreign subsidiaries. In response, we requested competent authority assistance under MAP for the 2009 through 2011 tax years. In January 2023, we received notification of a MAP resolution agreement for the 2009 through 2011 tax years, which we accepted in February 2023. In the first quarter of 2023, we recorded additional income tax expense of $31 million, inclusive of interest. During the first quarter of 2023, we reviewed the impact of the acceptance of this settlement position against our existing transfer pricing income tax reserves for the subsequent open tax years, which resulted in incremental income tax expense, inclusive of estimated interest, of $24 million. The total impact of these two adjustments resulted in an incremental income tax expense of $55 million recorded in the first quarter of 2023. Additionally, in connection with this IRS audit settlement: (i) during the second quarter of 2023, we made a U.S. federal tax payment of $113 million, inclusive of interest, to Expedia related to this IRS audit settlement, pursuant to the Tax Sharing Agreement with Expedia, and (ii) during the third quarter of 2023, we received a competent authority refund of $49 million, inclusive of interest income, from a foreign jurisdiction.

In January 2021, we received from HMRC an issue closure notice relating to adjustments for 2012 through 2016 tax years. These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries and would result in an increase to our worldwide income tax expense in an estimated range of $25 million to $35 million, exclusive of interest expense, at the close of the audit if HMRC prevails. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. We are also currently subject to audit by HMRC in tax years 2017 through 2022. If HMRC were to seek adjustments of a similar nature through a closure notice for transactions in these years, we could be subject to significant additional tax liabilities. Our policy is to review and update tax reserves as facts and circumstances change.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows during the periods presented:


	December 31,
	2024			2023			2022
	(in millions)
Balance, beginning of year	$	136		$	157		$	144
Increases to tax positions related to the current year		2			8			5
Increases to tax positions related to the prior year		34			17			29
Decreases due to lapsed statute of limitations		—			—			(20	)
Decreases due to tax positions related to the prior year		(3	)		(6	)		(1	)
Settlements during current year		(70	)		(40	)		—
Balance, end of year	$	99		$	136		$	157

As of December 31, 2024, we had $78 million of unrecognized tax benefits, inclusive of interest, which is classified as long-term and included in other long-term liabilities on our consolidated balance sheet. We also had $43 million of unrecognized tax benefits classified as long-term and included as an offset to our deferred tax asset on our consolidated balance sheet. The amount of unrecognized tax benefits, if recognized, would reduce income tax

expense by $53 million, due to correlative adjustments in other tax jurisdictions. We recognize interest and penalties related to unrecognized tax benefits in income tax expense on our consolidated statement of operations. As of December 31, 2024 and 2023, total gross interest accrued was $22 million and $45 million, respectively, and recorded to unrecognized tax benefits in other long-term liabilities on the consolidated balance sheets.