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


	Year Ended December 31,
	2023		2022		2021
	(in millions)
Domestic	$	95	$	37	$	(127	)
Foreign		30		30		(58	)
Income (loss) before income taxes	$	125	$	67	$	(185	)

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


	Year Ended December 31,
	2023			2022			2021
	(in millions)
Current income tax expense (benefit):
Federal	$	94		$	37		$	6
State		25			3			(1	)
Foreign		21			26			2
Current income tax expense (benefit)		140			66			7
Deferred income tax expense (benefit):
Federal		(9	)		(19	)		(21	)
State		6			1			(5	)
Foreign		(22	)		(1	)		(18	)
Deferred income tax expense (benefit)		(25	)		(19	)		(44	)
Provision (benefit) for income taxes	$	115		$	47		$	(37	)

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


	December 31,
	2023			2022
	(in millions)
Deferred tax assets:
Stock-based compensation	$	14		$	28
Net operating loss carryforwards		96			83
Provision for accrued expenses		8			6
Lease financing obligation		13			17
Foreign advertising spend		14			14
Tax credit carryforward		10			7
Capitalized research expenses		52			39
Interest carryforward		32			53
Other		14			19
Total deferred tax assets	$	253		$	266
Less: valuation allowance		(106	)		(114	)
Net deferred tax assets	$	147		$	152
Deferred tax liabilities:
Intangible assets	$	(42	)	$	(48	)
Property and equipment		(3	)		(6	)
Prepaid expenses		(4	)		(4	)
Building - corporate headquarters		(12	)		(16	)
Other		(1	)		(1	)
Total deferred tax liabilities	$	(62	)	$	(75	)
Net deferred tax asset (liability)	$	85		$	77

At December 31, 2023, we had federal, state, and foreign net operating loss carryforwards (“NOLs”) of approximately $2 million, $54 million, and $364 million, respectively. U.S. federal NOLs of $2 million expire at various times starting from 2029. State NOLs of $11 million may be carried forward indefinitely, while the remaining state NOLs of $43 million expire at various times starting from 2024. Foreign NOLs of $339 million may be carried forward indefinitely, while the remaining foreign NOLs of $25 million expire at various times starting from 2024.

As of December 31, 2023, we had a valuation allowance of approximately $106 million related to certain NOL carryforwards and other foreign deferred tax assets for which it is more likely than not, the tax benefit will not be realized. This amount represented a decrease of $8 million, as compared to the balance as of December 31, 2022. The decrease was primarily related to a change in a deferred tax asset in our U.K. subsidiaries.

Except for such 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,
	2023			2022			2021
	(in millions)
Income tax expense at the federal statutory rate	$	26		$	14		$	(39	)
Foreign rate differential (1)		—			—			(14	)
State income taxes, net of effect of federal tax benefit		6			5			(2	)
Unrecognized tax benefits and related interest		27			17			4
IRS audit settlement		31			—			—
Transfer pricing reserve adjustment		24			—			—
FDII, GILTI and other provisions		(9	)		(2	)		—
Research tax credit		(4	)		(2	)		(7	)
Stock-based compensation		22			11			(1	)
Change in valuation allowance		(6	)		5			8
Executive compensation		2			1			6
Other, net		(4	)		(2	)		8
Provision (benefit) for income taxes	$	115		$	47		$	(37	)

(1)

During 2021, intercompany debt was extinguished, which resulted in a reduction of our overall foreign rate differential.

The CARES Act allowed the Company to carryback our U.S. federal NOLs incurred in 2020, generating an expected U.S. federal tax benefit of $76 million, of which $64 million was refunded during the year ended December 31, 2022 ($15 million of this refund is recorded in other long-term liabilities on our consolidated balance sheet as of December 31, 2023, reflecting future transition tax payments to be made by the Company related to the 2017 Tax Act). The remaining refund of $12 million is included in accrued expenses and other current liabilities on our consolidated balance sheet as of December 31, 2023 and 2022, and is expected to be received during the year ending December 31, 2024.

In addition, certain governments have passed legislation to assist businesses during the COVID-19 pandemic through loans, wage subsidies, wage tax relief or other financial aid. We participated in several of these programs, including the CARES Act in the U.S., the United Kingdom's job retention scheme, as well as similar programs in other global jurisdictions. In addition, in certain countries, such as within the European Union, Singapore, Australia, and other global jurisdictions, we also participated in programs where government assistance was in the form of wage subsidies and reductions in wage-related employer taxes paid by us. We recognize these government assistance benefits when there is a reasonable assurance of compliance with the conditions associated with the assistance and the amount is received. During the years ended December 31, 2022 and 2021, we recognized government grants and other assistance benefits of $12 million and $9 million, respectively, while this amount was not material during the year ended December 31, 2023. These amounts are not income tax related and were recorded as a reduction of personnel and overhead costs within operating expenses in the consolidated statements of operations. The Company does not expect any additional future benefits of this nature.

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, 2023. As of December 31, 2023, $483 million of our cumulative undistributed foreign earnings were no longer considered to be indefinitely reinvested.

For purposes of governing certain of the ongoing relationships between Tripadvisor and Expedia at and after the Spin-Off, and to provide for an orderly transition, Tripadvisor and Expedia entered into various agreements at the time of the Spin-Off, and Tripadvisor has satisfied its obligations under such agreements. However, Tripadvisor continues to be subject to certain post Spin-Off obligations under the Tax Sharing Agreement. Under the Tax Sharing Agreement between Tripadvisor and Expedia, Tripadvisor is generally required to indemnify Expedia for any taxes resulting from the Spin-Off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) 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 2014 through 2016 and 2018 tax years and have various ongoing audits for foreign and state income tax returns. These audits include questions regarding or review of the timing and amount of income and deductions and the allocation of income among various tax jurisdictions. 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 2014. As of December 31, 2023, 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 disclosed in previous filings, including in our Annual Report on Form 10-K for the year ended December 31, 2022, we received Notices of Proposed Adjustments ("NOPA") from the IRS with respect to income tax returns filed by Expedia when Tripadvisor was part of Expedia Group’s consolidated income tax return for the 2009, 2010, and 2011 tax years. The assessment was related to certain transfer pricing arrangements with foreign subsidiaries, for which we had requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for the 2009 through 2011 tax years. In January 2023, we received a final notice from the IRS regarding a MAP settlement for the 2009 through 2011 tax years, which the Company accepted in February 2023. In the first quarter of 2023, we recorded additional income tax expense as a discrete item, inclusive of interest, of $31 million specifically related to this settlement. 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 tax years, which resulted in incremental income tax expense, inclusive of estimated interest, of $24 million. The total impact of these adjustments resulted in an incremental income tax expense of $55 million, which was recognized during the three months ended March 31, 2023. During the three months ended June 30, 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. During the three months ended September 30, 2023, we received the expected competent authority refund of $49 million, inclusive of interest income. We anticipate the federal tax benefits, net of remaining state tax payments due, associated with this IRS audit settlement will be substantially settled during 2024, resulting in an estimated net cash inflow of $5 million to $10 million.

Separately, during August 2020, we received a NOPA from the IRS for the 2014, 2015, and 2016 tax years. These proposed adjustments pertain to certain transfer pricing arrangements with our foreign subsidiaries. We disagree with the proposed adjustments, and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. In addition to the risk of additional tax for the years discussed above, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we may be subject to significant additional tax liabilities. We have previously requested competent authority assistance under MAP for the tax years 2014 through 2016. We reviewed our transfer pricing reserves as of December 31, 2023 and, based on the facts and circumstances that existed as of the reporting date, consider them to be the Company’s best estimate as of December 31, 2023. In January 2024, we received notification of a MAP resolution agreement for the 2014 through 2016 tax years, which we accepted in February 2024. We anticipate this will result in an increase to our worldwide income tax expense in an estimated range of $30 million to $60 million in the first quarter of 2024, and will result in an estimated net operating cash outflow of $80 million to $130 million expected during 2024. These estimated ranges take into consideration competent authority relief, existing income tax reserves, transition tax regulations and estimated interest expense. This MAP resolution supersedes the NOPA for 2014 through 2016 from the IRS, described above. We will review the impact of this resolution in relation to our transfer pricing income tax reserves for the subsequent open tax years during the first quarter of 2024. Based on this new information received subsequent to December 31, 2023, adjustments for the open tax years subsequent to 2016 may also occur, which could be material.

As of December 31, 2022, we had recorded $204 million of unrecognized tax benefits, inclusive of interest, classified as other long-term liabilities on our consolidated balance sheet. As a result of the Company's acceptance of MAP with the IRS for the tax years 2009 through 2011, and its impact on other ongoing IRS audits, as described above, during the first quarter of 2023, we reduced this unrecognized tax benefits liability by $59 million, reclassifying this balance to accrued expenses and other current liabilities on our consolidated balance sheet, which

was subsequently paid during 2023. We also reduced our long-term income taxes receivable by $45 million, representing our estimate of competent authority relief, or payment due from a foreign jurisdiction, which was received during the third quarter of 2023, as noted above, previously recorded to other long-term assets on our consolidated balance sheet as of December 31, 2022.

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. 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,
	2023			2022			2021
	(in millions)
Balance, beginning of year	$	157		$	144		$	144
Increases to tax positions related to the current year		8			5			5
Increases to tax positions related to the prior year		17			29			1
Decreases due to lapsed statute of limitations		—			(20	)		—
Decreases due to tax positions related to the prior year		(6	)		(1	)		—
Settlements during current year		(40	)		—			(6	)
Balance, end of year	$	136		$	157		$	144

As of December 31, 2023, we had $153 million of unrecognized tax benefits, inclusive of interest, which is classified as long-term and primarily included in other long-term liabilities on our consolidated balance sheet. The amount of unrecognized tax benefits, if recognized, would reduce income tax expense by $114 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, 2023, total gross interest accrued was $50 million, of which $45 million was recorded in unrecognized tax benefits in other long-term liabilities and $5 million was recorded in income taxes receivable in other long-term assets, net on the consolidated balance sheet. As of December 31, 2022, total gross interest accrued was $47 million and was recorded to unrecognized tax benefits in other long-term liabilities on the consolidated balance sheet.