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Income Taxes (Notes)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block] INCOME TAXES
The components of pretax loss for domestic and foreign operations consisted of the following:
 Year Ended December 31,
 202420232022
Domestic$(133)$(119)$(368)
Foreign4 6 17 
Pretax loss
$(129)$(113)$(351)
The components of income tax benefit consisted of the following:
 Year Ended December 31,
 202420232022
Current:
Federal$(2)$9 $24 
State(1)5 — 
Foreign3 4 4 
Total current— 18 28 
Deferred:
Federal(13)(31)(78)
State11 (2)(18)
Foreign— — — 
Total deferred(2)(33)(96)
Income tax benefit
$(2)$(15)$(68)
A reconciliation of the Company’s effective income tax rate at the U.S. federal statutory rate of 21% to the actual expense was as follows:
 Year Ended December 31,
 202420232022
Federal statutory rate21 %21 %21 %
State and local income taxes, net of federal tax benefits5 1 3 
Non-deductible equity compensation(1)(1)— 
Non-deductible executive compensation(4)(4)(1)
Goodwill impairment— (5)(8)
Uncertain tax positions— — (1)
Tax credits (a)
5 6 7 
Net change in valuation allowance (b)
(21)(5)— 
Other permanent differences(3)— (2)
Effective tax rate2 %13 %19 %
_______________
(a)This item in 2022 includes a benefit related to the completion of a research tax credit study for tax years 2016 through 2022.
(b)As a result of the Company's recent history of losses, the Company increased the valuation allowance, primarily on foreign tax credits and state net operating losses.
Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the deferred income tax assets and liabilities are as follows:
December 31,
20242023
Deferred income tax assets:
Net operating loss carryforwards$37 $36 
Tax credit carryforwards32 28 
Accrued liabilities and deferred income108 117 
Interest expense limitation carryforward20 5 
Operating leases105 120 
Minimum pension obligations12 13 
Provision for doubtful accounts9 10 
Liability for unrecognized tax benefits2 2 
Total deferred tax assets325 331 
Less: valuation allowance(51)(25)
Total deferred income tax assets after valuation allowance274 306 
Deferred income tax liabilities:
Depreciation and amortization367 384 
Operating leases87 99 
Prepaid expenses9 9 
Basis difference in investment in joint ventures18 21 
Total deferred tax liabilities481 513 
Net deferred income tax liabilities$(207)$(207)
As of December 31, 2024, the Company’s deferred tax asset for net operating loss carryforwards is primarily related to certain state net operating loss carryforwards which expire between 2025 and 2036. The Company’s deferred tax asset for tax credits carryforwards is primarily related to foreign tax credits which expire between 2024 and 2034. The Company's interest expense limitation carryforward never expires.
Accounting for Uncertainty in Income Taxes
The Company utilizes the FASB guidance for accounting for uncertainty in income taxes, which prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company reflects changes in its liability for unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. As of December 31, 2024, the Company’s gross liability for unrecognized tax benefits was $20 million, of which $18 million would affect the Company’s effective tax rate, if recognized.
The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. Tax returns for the 2006 through 2024 tax years remain subject to examination by federal and certain state tax authorities. In significant foreign jurisdictions, tax returns for the 2018 through 2024 tax years generally remain subject to examination by their respective tax authorities. The Company believes that it is reasonably possible that the total amount of its unrecognized tax benefits could decrease by $12 million in certain taxing jurisdictions where the statute of limitations is set to expire within the next twelve months.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in interest expense and operating expenses, respectively. The Company recognized an increase in interest expense of $1 million in each of the years ended December 31, 2024, 2023 and 2022.
The rollforward of unrecognized tax benefits are summarized in the table below:
Unrecognized tax benefits—January 1, 2022$17 
Gross increases - tax positions in prior periods3 
Gross decreases - tax positions in prior periods(1)
Gross increases - tax positions in current period1 
Unrecognized tax benefits—December 31, 202220 
Gross decreases - tax positions in prior periods(1)
Gross increases - tax positions in current period1 
Unrecognized tax benefits—December 31, 202320 
Gross decreases - tax positions in prior periods(1)
Gross increases - tax positions in current period1 
Unrecognized tax benefits—December 31, 2024$20 
The Company is subject to income taxes in the United States and several foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording related assets and liabilities. In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. The Company is regularly under audit by tax authorities whereby the outcome of the audits is uncertain. The Company believes there is appropriate support for positions taken on its tax returns. The liabilities that have been recorded represent the best estimates of the probable loss on certain positions and are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. However, the outcomes of tax audits are inherently uncertain.
Tax Sharing Agreement
Under the Tax Sharing Agreement with Cendant, Wyndham Worldwide and Travelport, the Company is generally responsible for 62.5% of payments made to settle claims with respect to tax periods ending on or prior to December 31, 2006 that relate to income taxes imposed on Cendant and certain of its subsidiaries, the operations (or former operations) of which were determined by Cendant not to relate specifically to the respective businesses of Anywhere, Wyndham Worldwide, Avis Budget or Travelport. With respect to any remaining residual legacy Cendant tax liabilities, the Company and its former parent believe there is appropriate support for the positions taken on Cendant’s tax returns. However, tax audits and any related litigation, including disputes on the allocation of tax liabilities between parties under the Tax Sharing Agreement, could result in outcomes for the Company that are different from those reflected in the Company’s historical financial statements.