Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity File Number | 001-38617 | ||
Entity Registrant Name | Frontdoor, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-3871179 | ||
Entity Address, Address Line One | 3400 Players Club Parkway | ||
Entity Address, City or Town | Memphis | ||
Entity Address, State or Province | TN | ||
Entity Address, Postal Zip Code | 38125 | ||
City Area Code | 901 | ||
Local Phone Number | 701-5000 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | FTDR | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Common Stock, Shares Outstanding | 78,382,043 | ||
Entity Public Float | $ 2.6 | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Entity Central Index Key | 0001727263 | ||
Documents Incorporated by Reference | Documents incorporated by reference: Portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s 2024 annual meeting of stockholders (the “Proxy Statement”) are incorporated by reference into Part III hereof. Such Proxy Statement will be filed within 120 days of the registrant’s fiscal year ended December 31, 2023. | ||
Auditor Firm ID | 34 | ||
Auditor Location | Memphis, Tennessee | ||
Auditor Name | Deloitte & Touche LLP | ||
Document Financial Statement Error Correction [Flag] | false |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Operations and Comprehensive Income [Abstract] | |||
Revenue | $ 1,780 | $ 1,662 | $ 1,602 |
Cost of services rendered | 895 | 952 | 818 |
Gross Profit | 885 | 710 | 784 |
Selling and administrative expenses | 581 | 521 | 511 |
Depreciation and amortization expense | 37 | 34 | 35 |
Goodwill and intangibles impairment | 14 | ||
Restructuring charges | 16 | 20 | 3 |
Interest expense | 40 | 31 | 39 |
Interest and net investment income | (16) | (4) | (1) |
Loss on extinguishment of debt | 31 | ||
Income before Income Taxes | 229 | 93 | 168 |
Provision for income taxes | 57 | 22 | 39 |
Net Income | 171 | 71 | 128 |
Other Comprehensive Income (Loss), Net of Income Taxes: | |||
Unrealized (loss) gain on derivative instruments, net of income taxes | (3) | 27 | 15 |
Total Other Comprehensive (Loss) Income, Net of Income Taxes: | (3) | 27 | 15 |
Comprehensive Income | $ 169 | $ 98 | $ 143 |
Earnings per Share: | |||
Basic | $ 2.13 | $ 0.87 | $ 1.51 |
Diluted | $ 2.12 | $ 0.87 | $ 1.50 |
Weighted-average Common Shares Outstanding: | |||
Basic | 80.5 | 81.8 | 85.1 |
Diluted | 80.9 | 82 | 85.5 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 325 | $ 292 |
Receivables, less allowance of $5 and $4, respectively | 6 | 5 |
Prepaid expenses and other current assets | 32 | 33 |
Total Current Assets | 363 | 330 |
Other Assets: | ||
Property and equipment, net | 60 | 66 |
Goodwill | 503 | 503 |
Intangible assets, net | 143 | 148 |
Operating lease right-of-use assets | 3 | 11 |
Deferred customer acquisition costs | 12 | 16 |
Other assets | 5 | 8 |
Total Assets | 1,089 | 1,082 |
Current Liabilities: | ||
Accounts payable | 76 | 80 |
Accrued liabilities: | ||
Payroll and related expenses | 38 | 22 |
Home warranty claims | 76 | 103 |
Other | 22 | 21 |
Deferred revenue | 102 | 121 |
Current portion of long-term debt | 17 | 17 |
Total Current Liabilities | 331 | 364 |
Long-Term Debt | 577 | 592 |
Other Long-Term Liabilities: | ||
Deferred tax liabilities, net | 25 | 39 |
Operating lease liabilities | 16 | 18 |
Other long-term liabilities | 5 | 8 |
Total Other Long-Term Liabilities | 46 | 65 |
Commitments and Contingencies (Note 8) | ||
Shareholders' Equity: | ||
Common stock, $0.01 par value; 2,000,000,000 shares authorized; 86,553,387 shares issued and 78,378,511 shares outstanding as of December 31, 2023 and 86,079,773 shares issued and 81,517,243 shares outstanding as of December 31, 2022 | 1 | 1 |
Additional paid-in capital | 117 | 90 |
Retained earnings | 296 | 124 |
Accumulated other comprehensive income | 6 | 8 |
Less treasury stock, at cost; 8,174,876 shares as of December 31, 2023 and 4,562,530 shares as of December 31, 2022 | (283) | (162) |
Total Shareholders' Equity | 136 | 61 |
Total Liabilities and Shareholders' Equity | $ 1,089 | $ 1,082 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Consolidated Statements of Financial Position [Abstract] | ||
Allowance for receivables (in dollars) | $ 5 | $ 4 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 86,553,387 | 86,079,773 |
Common stock, shares outstanding (in shares) | 78,378,511 | 81,517,243 |
Treasury stock (in shares) | 8,174,876 | 4,562,530 |
Consolidated Statements of Chan
Consolidated Statements of Changes in (Deficit) Equity - USD ($) shares in Millions, $ in Millions | Common Stock Outstanding [Member] | Additional Paid-in Capital [Member] | (Accumulated Deficit) Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock [Member] | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 1 | $ 46 | $ (75) | $ (33) | $ (61) | |
Balance, shares at Dec. 31, 2020 | 85 | |||||
Net income | 128 | 128 | ||||
Stock-based compensation expense | 25 | 25 | ||||
Exercise of stock options | 2 | 2 | ||||
Taxes paid related to net share settlement of equity awards | (5) | (5) | ||||
Issuance of common stock related to ESPP | 2 | 2 | ||||
Repurchase of common stock | $ (103) | |||||
Repurchase of common stock | (103) | |||||
Repurchase of common stock, shares | (3) | |||||
Other comprehensive income (loss), net of tax | 15 | 15 | ||||
Balance at end of period at Dec. 31, 2021 | $ 1 | 70 | 53 | (18) | (103) | 2 |
Balance, shares at Dec. 31, 2021 | 83 | |||||
Net income | 71 | 71 | ||||
Stock-based compensation expense | 22 | 22 | ||||
Taxes paid related to net share settlement of equity awards | (3) | (3) | ||||
Issuance of common stock related to ESPP | 1 | 1 | ||||
Repurchase of common stock | (59) | (59) | ||||
Repurchase of common stock | (59) | |||||
Repurchase of common stock, shares | (2) | |||||
Other comprehensive income (loss), net of tax | 27 | 27 | ||||
Balance at end of period at Dec. 31, 2022 | $ 1 | 90 | 124 | 8 | (162) | 61 |
Balance, shares at Dec. 31, 2022 | 82 | |||||
Net income | 171 | 171 | ||||
Stock-based compensation expense | 26 | 26 | ||||
Exercise of stock options | 4 | 4 | ||||
Taxes paid related to net share settlement of equity awards | (4) | (4) | ||||
Issuance of common stock related to ESPP | 1 | 1 | ||||
Repurchase of common stock | (121) | (120) | ||||
Repurchase of common stock | (121) | |||||
Repurchase of common stock, shares | (4) | |||||
Other comprehensive income (loss), net of tax | (3) | (3) | ||||
Balance at end of period at Dec. 31, 2023 | $ 1 | $ 117 | $ 296 | $ 6 | $ (283) | $ 136 |
Balance, shares at Dec. 31, 2023 | 78 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Cash Flows [Abstract] | |||
Cash and Cash Equivalents at Beginning of Period | $ 292 | $ 262 | $ 597 |
Cash Flows from Operating Activities: | |||
Net Income | 171 | 71 | 128 |
Adjustments to reconcile net income to net cash provided from operating activities: | |||
Depreciation and amortization expense | 37 | 34 | 35 |
Deferred income tax benefit | (13) | (10) | (2) |
Stock-based compensation expense | 26 | 22 | 25 |
Goodwill and intangibles impairment | 14 | ||
Restructuring charges | 16 | 20 | 3 |
Payments for restructuring charges | (7) | (5) | (2) |
Loss on extinguishment of debt | 31 | ||
Other | 6 | 1 | 5 |
Changes in working capital: | |||
Receivables | 2 | (2) | |
Prepaid expenses and other current assets | (1) | (3) | |
Accounts payable | (4) | 15 | 10 |
Deferred revenue | (19) | (35) | (32) |
Accrued liabilities | (7) | 10 | (6) |
Accrued interest payable | (9) | ||
Current income taxes | (1) | 6 | 1 |
Net Cash Provided from Operating Activities | 202 | 142 | 185 |
Cash Flows from Investing Activities: | |||
Purchases of property and equipment | (32) | (40) | (31) |
Other investing activities | 4 | ||
Net Cash Used for Investing Activities | (32) | (35) | (31) |
Cash Flows from Financing Activities: | |||
Borrowings of debt, net of discount | 638 | ||
Repayments of debt | (17) | (17) | (994) |
Debt issuance costs paid | (8) | ||
Call premium paid on retired debt | (21) | ||
Repurchase of common stock | (121) | (59) | (103) |
Other financing activities | 1 | (2) | (1) |
Net Cash Used for Financing Activities | (137) | (77) | (489) |
Cash Increase (Decrease) During the Period | 34 | 29 | (335) |
Cash and Cash Equivalents at End of Period | $ 325 | $ 292 | $ 262 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business [Abstract] | |
Description of Business | Note 1. Description of Business Frontdoor is the leading provider of home warranties in the United States, as measured by revenue, and operates primarily under the American Home Shield brand. Our customizable home warranties help customers protect and maintain their homes, typically their most valuable asset, from costly and unplanned breakdowns of essential home systems and appliances. Our home warranty customers usually subscribe to an annual service plan agreement that covers the repair or replacement of major components of more than 20 home systems and appliances, including electrical, plumbing, HVAC systems, water heaters, refrigerators, dishwashers and ranges/ovens/cooktops, as well as optional coverages for electronics, pools, spas and pumps. Frontdoor also provides on-demand home services and a one-stop app experience for home repair and maintenance. Enabled by our Streem technology, the app empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. As of December 31, 2023, we had 2.0 million active home warranties across all brands in the United States. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Consolidation Our consolidated financial statements include all of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements requires management to make certain estimates and assumptions required under U.S. GAAP that may differ from actual results. The more significant areas requiring the use of management estimates relate to: revenue recognition; home warranty claims accruals; the valuation of property and equipment, goodwill and intangible assets; useful lives for recognizing depreciation and amortization expense; accruals for current and deferred tax accounts; stock-based compensation expense; and litigation matters. Revenue The majority of our revenue is generated from annual home warranty contracts entered into with our customers. Home warranty contracts are typically one year in duration. Home warranty claims costs are expensed as incurred. We recognize revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative value provided to our customers. We regularly review our estimates of claims costs and adjust our estimates when appropriate. Revenues are presented net of sales taxes collected and remitted to government taxing authorities in the accompanying consolidated statements of operations and comprehensive income. We record a receivable due from customers once we have an unconditional right to invoice and receive payment in the future related to the services provided and anticipate the collection of amounts due to us. We invoice our monthly-pay customers on a straight-line basis over the contract term. As a result, contract assets arise when we recognize revenue for our home warranty contracts prior to a customer being invoiced. Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. Property and Equipment, Goodwill and Intangible Assets Property and equipment consist of the following: As of Estimated December 31, Useful Lives (In millions) 2023 2022 (Years) Buildings and improvements $ 4 $ 14 10 - 40 Technology and communications 159 130 3 - 7 Office equipment, furniture and fixtures, and vehicles 3 11 5 - 7 166 155 Less accumulated depreciation ( 105 ) ( 89 ) Property and equipment, net $ 60 $ 66 Depreciation of property and equipment was $ 32 million, $ 27 million and $ 24 million for the years ended December 31, 2023, 2022 and 2021, respectively. Property and equipment are recorded at cost. Property and equipment and intangible assets with finite lives are depreciated on a straight-line basis over their estimated useful lives. These lives are based on our previous experience for similar assets, potential market obsolescence and other industry and business data. Property and equipment and finite-lived intangible assets are tested for recoverability if circumstances indicate a potential impairment. If the carrying amount is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives could cause us to adjust the carrying values or future expense accordingly. Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment on an annual basis, or more frequently if circumstances indicate a potential impairment. We perform our annual assessment for impairment on October 1 of every year. Goodwill and indefinite-lived intangible assets are tested for impairment at the reporting unit level. The Company can elect to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the reporting unit does not pass the qualitative assessment, or if the Company does not elect to perform the initial qualitative assessment, then the reporting unit’s carrying amount is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The discounted cash flow approach uses expected future operating results. The market approach uses comparable company information to determine revenue and earnings multiples to value our reporting units. Failure to achieve these expected results or market multiples may cause a future impairment of goodwill at the reporting unit. Goodwill and indefinite-lived intangible assets are considered impaired if the carrying amount of the reporting unit exceeds its fair value. See Note 4 to the accompanying consolidated financial statements for information related to our goodwill and intangible assets. Advertising We expense advertising costs as incurred. Advertising expense for the years ended December 31, 2023, 2022 and 2021 was $ 156 million, $ 115 million and $ 106 million, respectively. Leases We determine if an arrangement is a lease at inception. We recognize a right-of-use (“ROU”) asset and lease liability for all leases with terms of 12 months or more. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our incremental borrowing rate is determined based on our secured borrowing rating and the lease term. Our operating lease ROU assets are recorded net of lease incentives. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for separately for our real estate leases. See Note 5 to the accompanying consolidated financial statements for information related to our leases. Restricted Net Assets There are regulatory restrictions on the ability of certain of our subsidiaries to transfer funds to us. The payments of ordinary and extraordinary dividends by our subsidiaries are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can make to us. As of December 31, 2023, the total net assets subject to these regulatory restrictions was $ 157 million. Financial Instruments and Credit Risk We hedge the interest payments on a portion of our variable rate debt through the use of an interest rate swap contract. We have classified our interest rate swap contract as a cash flow hedge and recorded the hedging instrument in the consolidated statements of financial position as either an asset or liability at fair value. The effect of derivative financial instrument transactions could have a material impact on our financial statements. We do not hold or issue derivative financial instruments for trading or speculative purposes. Financial instruments, which potentially subject us to financial and credit risk, consist principally of receivables. The majority of our receivables have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. We maintain an allowance for losses based upon the expected collectability of receivables. See Note 15 to the accompanying consolidated financial statements for information relating to the fair value of financial instruments. Stock-Based Compensation Expense Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, we estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly in the period the forfeiture occurs or the awards vest. See Note 9 to the accompanying consolidated financial statements for more details, including the calculation of stock-based compensation expense for stock options, performance options, RSUs, performance shares and RSAs. Income Taxes Frontdoor files a consolidated U.S. federal income tax return. State and local returns are filed both on a separate company basis and on a combined unitary basis with Frontdoor. Current and deferred income taxes are provided for on a separate company basis. We account for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income during the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when management determines that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The financial effect of changes in tax laws or rates is accounted for in the period of enactment. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. We recognize potential interest and penalties related to unrecognized tax benefits as income tax expense. Segment Reporting We are required to report annual and interim financial and descriptive information about our reportable operating segments. We operate our business under six brand names that primarily engage in the activity of providing home warranties to our customers. Our chief operating decision maker, who is our Chief Executive Officer, regularly evaluates financial information on a consolidated basis in deciding how to allocate resources and in assessing performance. As such, we operate as one operating segment, which is comprised of our six brands, and we have one reportable segment. Newly Issued Accounting Standards In 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848), which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The sunset provision was set for December 31, 2022. In 2022, the FASB issued ASU 2022-06, which defers the sunset date to December 31, 2024, after which entities will no longer be permitted to apply the relief in in Topic 848. In March 2023, in connection with the planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with SOFR as the benchmark rate under the Credit Agreement. We adopted ASU 2020-04 in connection with this transition of the benchmark rate under our Credit Agreement. This transition did not have a material impact on our consolidated financial statements and related disclosures. In 2023, the FASB issued ASU 2023-07 , Segment Reporting (Topic 280), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the guidance should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable. We intend to adopt the provisions of this guidance in conjunction with our 2024 Annual Report on Form 10-K for the year ended December 31, 2024. In 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740), which improves income tax disclosure requirements, primarily through enhanced disclosures related to the rate reconciliation and income taxes paid information. This guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and the guidance should be applied on a prospective basis. Retrospective application is permitted. We intend to adopt the provisions of this guidance in conjunction with our 2024 Annual Report on Form 10-K for the year ended December 31, 2024. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue [Abstract] | |
Revenue | Note 3. Revenue The majority of our revenue is generated from annual home warranty contracts entered into with our customers. Home warranty contracts are typically one year in duration. We derive substantially all of our revenue from customers in the United States. We disaggregate revenue from contracts with customers into major customer acquisition channels. We determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Revenue by major customer acquisition channel is as follows: ___ Year Ended December 31, (In millions) 2023 2022 2021 Renewals $ 1,367 $ 1,203 $ 1,103 Real estate (1) 141 184 252 Direct-to-consumer (1) 194 219 201 Other 77 56 46 Total $ 1,780 $ 1,662 $ 1,602 _____________________________ (1) First-year revenue only. Our home warranty contracts have one performance obligation, which is to provide for the repair or replacement of essential home systems and appliances, as applicable per the contract. We recognize revenue at the agreed upon contractual amount over time using the input method in proportion to the costs expected to be incurred in performing services under the contracts. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative fair value of the services provided to the customer. As the costs to fulfill the obligations of the home warranties are incurred on an other-than-straight-line basis, we utilize historical evidence to estimate the expected claims expense and related timing of such costs and make a corresponding adjustment each period to the timing of our related revenue recognition. This adjustment to the straight-line revenue creates a contract asset or contract liability, as described under the heading “Contract Assets and Liabilities” below. We regularly review our estimates of claims costs and adjust these estimates when appropriate. Renewals Revenue from customer renewals of home warranty contracts, which were previously initiated in the real estate or direct-to-consumer channel are classified as renewal revenue above. Renewals relate to consecutive contract periods and take place at the end of the first year of a real estate or direct-to-consumer home warranty contract. Customer payments for renewals are primarily received in installments over the new contract period. Real estate Real estate home warranties are sold through annual contracts which occur in connection with a real estate sale. These plans are typically paid in full at closing on the real estate transaction. First-year revenue from the real estate channel is classified as real estate above. At the option of the customer, upon renewal of the contract, the future revenue derived from home warranties sold in this channel is classified as renewal revenue as described above. Direct-to-consumer Direct-to-consumer home warranties are sold through annual contracts which occur in response to our marketing efforts. Customer payments for direct-to-consumer sales are primarily received in installments over the contract period. First-year revenue from the direct-to-consumer channel is classified as direct-to-consumer above. At the option of the customer, upon renewal of the contract, the future revenue derived from home warranties sold in this channel is classified as renewal revenue as described above. Other Other revenue primarily includes revenue generated by on-demand home services, as well as administrative fees and ancillary services attributable to our home warranty contracts. Deferred Customer Acquisition Costs We capitalize the incremental costs of obtaining a contract with a customer and recognize the related expense using the input method in proportion to the costs expected to be incurred in performing services under the contract, over the expected customer relationship period. Deferred customer acquisition costs were $ 12 million and $ 16 million as of December 31, 2023 and 2022, respectively. Amortization of deferred customer acquisition costs was $ 16 million, $ 19 million and $ 19 million for the years ended December 31, 2023, 2022 and 2021, respectively. There were no impairment losses related to these capitalized costs during the years ended December 31, 2023, 2022 and 2021. Receivables, Less Allowance We record a receivable due from customers once we have an unconditional right to invoice and receive payment in the future related to the services provided and anticipate the collection of amounts due to us. Contracts for home warranties may be invoiced upfront or monthly in straight-line installment payments over the contract period. The payment terms are determined prior to the execution of the contract. Contract Assets and Liabilities Contract assets arise when we recognize revenue for our home warranty contracts prior to a customer being invoiced. These timing differences are created when the recognition of revenue in proportion to the costs expected to be incurred in performing the services under the contract are accelerated as compared to the recognition of revenue on a straight-line basis over the contract period. There were no contract assets as of December 31, 2023. Our contract liabilities consist of deferred revenue which is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. A summary of the changes in deferred revenue for the year ended December 31, 2023 is as follows: (In millions) Balance as of December 31, 2022 $ 121 Deferral of revenue 229 Recognition of deferred revenue ( 248 ) Balance as of December 31, 2023 $ 102 There was approximately $ 117 million of revenue recognized during the year ended December 31, 2023 that was included in the deferred revenue balance as of December 31, 2022. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 4. Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment on an annual basis, or more frequently if circumstances indicate a potential impairment. We perform our annual assessment for impairment on October 1 of every year. In connection with the preparation of our consolidated financial statements for the third quarter of 2022, we determined that indicators of a potential goodwill and intangible assets impairment were present for our Streem reporting unit. In particular, we began to shift the focus of our Streem technology platform to primarily concentrate on integrating the technology into our core product offerings. We continue to license this technology to third-party business-to-business customers as a software-as-a-service platform but intend to discontinue this third-party business by the end of 2024. This shift in focus resulted in significantly lower projected revenue for Streem. We performed an interim impairment analysis of the Streem reporting unit as of September 30, 2022. In performing the discounted cash flow analysis, we determined that the carrying amount of the Streem reporting unit exceeded its fair value. An impairment charge of $ 14 million was recognized during the third quarter of 2022, which comprised the remaining net carrying amount of Streem’s goodwill of $ 9 million and intangible assets of $ 5 million. The balance of goodwill was $ 503 million as of December 31, 2023 and 2022. There were no goodwill impairment charges recorded in the years ended December 31, 2023 and 2021. The following table provides a summary of the components of our intangible assets: As of December 31, 2023 2022 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 141 $ — $ 141 $ 141 $ — $ 141 Customer relationships 173 ( 173 ) — 173 ( 172 ) — Developed technology 19 ( 17 ) 2 19 ( 13 ) 5 Other 32 ( 32 ) — 32 ( 31 ) 1 Total $ 365 $ ( 221 ) $ 143 $ 365 $ ( 217 ) $ 148 ___________________________________ (1) Not subject to amortization. Amortization expense was $ 4 million , $ 7 million and $ 11 million for the years ended December 31, 2023, 2022 and 2021, respectively. As indicated above, an impairment charge of $ 5 million was recognized during the year ended December 31, 2022 related to Streem’s intangible assets. There were no intangible asset impairment charges recorded in the years ended December 31, 2023 and 2021. The following table outlines expected amortization expense for existing intangible assets for the next five years: (In millions) 2024 $ 2 2025 — 2026 — 2027 — 2028 — Total $ 3 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 5. Leases We have operating leases primarily for our corporate headquarters located in Memphis, Tennessee, a collaboration center located in Scottsdale, Arizona and a technology collaboration center in Pune, India. We also continue to lease certain office space in other geographies, which we have, as indicated below, either exited or subleased. Our leases have remaining lease terms ranging from less than one year to 11 years, some of which include options to extend the leases for up to five years . The weighted-average remaining lease term and weighted-average discount rate related to our operating leases are as follows: As of December 31, 2023 2022 Weighted-average remaining lease term (years) 9 9 Weighted-average discount rate 6.5 % 6.3 % We recognized operating lease expense of $ 3 million, $ 4 million and $ 4 million for the years ended December 31, 2023, 2022 and 2021, respectively. These expenses are included in selling and administrative expenses in the accompanying consolidated statements of operations and comprehensive income. Supplemental balance sheet information related to our operating lease liabilities is as follows: As of December 31, (In millions) 2023 2022 Other accrued liabilities $ 2 $ 3 Operating lease liabilities 16 18 Total operating lease liabilities $ 18 $ 21 Supplemental cash flow information related to our operating leases is as follows: Year Ended December 31, (In millions) 2023 2022 2021 Cash paid on operating lease liabilities (1) $ 4 $ 5 $ 5 Leased assets obtained in exchange for new lease liabilities — 3 6 ___________________________________ (1) Amount is presented net of cash provided from sublease income. The following table presents the maturities of our operating lease liabilities as of December 31, 2023 : (In millions) 2024 (1) 2 2025 (1) 2 2026 (1) 2 2027 3 2028 2 Thereafter 10 Total future lease payments (1) 21 Less imputed interest ( 6 ) Total operating lease liabilities (1) $ 15 ___________________________________ (1) Amount is presented net of future sublease income totaling $ 3 million, which relates to the years ending December 31, 2024 through December 31, 2026. Sublease of Prior Corporate Headquarters On August 10, 2022, we subleased our prior corporate headquarters facility in Memphis, Tennessee. As a result of us exiting the facility on June 27, 2022, we incurred a non-cash impairment charge of $ 11 million for the year ended December 31, 2022. Closure of Leased Facilities In August 2023, we entered into a new lease in Scottsdale, Arizona and subsequently decided to exit our leased facility in Phoenix, Arizona. Additionally, in November 2023, we decided to exit our leased facilities in Seattle, Washington, Portland, Oregon and Denver, Colorado. As a result of exiting these leased facilities during 2023, we incurred non-cash impairment charges of $ 5 million for the year ended December 31, 2023 relating to the corresponding operating lease right-of-use assets. The non-cancelable operating lease agreement for the collaboration center located in Scottsdale, Arizona, commenced in February 2024 and has an initial term of 10 years, unless terminated earlier. We are obligated to make lease payments totaling approximately $ 8 million over the lease term, with $ 1 million in 2024 and $ 7 million in the years thereafter (2025-2033), which are not included in the table above. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | Note 6. Income Taxes As of December 31, 2023, 2022 and 2021, we had $ 5 million, $ 8 million and $ 7 million of unrecognized tax benefits, respectively, all of which would impact the effective tax rate if recognized. The table below summarizes the changes in gross unrecognized tax benefits for the years ended December 31, 2023 and 2022: (In millions) Balance as of December 31, 2021 $ 7 Increases in tax positions for current year 1 Balance as of December 31, 2022 8 Decreases in tax positions for current year ( 2 ) Balance as of December 31, 2023 $ 5 Interest and penalties accrued on the liability for unrecognized tax benefits and recognized as income tax expense are less than $ 1 million for the year ended December 31, 2023. We are subject to taxation in the United States , various states and foreign jurisdictions. Due to expired statutes, the majority of our U.S. federal, state and local income tax returns for the years prior to 2020 are no longer subject to examination by tax authorities. Substantially all of our income before income taxes for the years ended December 31, 2023, 2022 and 2021 was generated in the United States . The reconciliation of income tax computed at the U.S. federal statutory tax rate to our effective income tax rate is as follows: Year Ended December 31, 2023 2022 2021 Tax at U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of U.S. federal benefit 2.4 0.7 3.1 Other permanent items 0.9 ( 0.2 ) ( 0.3 ) Stock-based compensation 1.2 2.2 0.5 Goodwill impairment — 2.0 — Tax Credits ( 0.7 ) ( 3.2 ) ( 1.9 ) Uncertain tax positions 0.2 1.3 1.1 Effective rate 25.0 % 23.8 % 23.4 % Income tax expense is as follows: Year Ended December 31, (In millions) 2023 2022 2021 Current: U.S. federal $ 60 $ 28 $ 33 State and local 10 4 7 70 32 41 Deferred: U.S. federal ( 11 ) ( 7 ) ( 1 ) State and local ( 3 ) ( 2 ) — ( 13 ) ( 10 ) ( 2 ) Provision for income taxes $ 57 $ 22 $ 39 Significant components of our deferred tax balances are as follows: As of December 31, (In millions) 2023 2022 Long-term deferred tax assets (liabilities): Intangible assets $ ( 45 ) $ ( 45 ) Property and equipment 4 ( 3 ) Deferred customer acquisition costs ( 3 ) ( 4 ) Prepaid expenses and other assets ( 2 ) ( 2 ) Operating lease right-of-use assets ( 1 ) ( 2 ) Receivables allowances 1 1 Accrued liabilities 9 5 Other long-term liabilities 7 7 Operating lease liabilities 4 5 Deferred interest expense ( 2 ) ( 2 ) Net operating loss and tax credit carryforwards 2 2 Valuation allowance ( 1 ) — Net long-term deferred tax liabilities $ ( 25 ) $ ( 39 ) |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Note 7. Restructuring Charges We incurred restructuring charges of $ 16 million ($ 12 million, net of tax), $ 20 million ($ 15 million, net of tax) and $ 3 million ($ 2 million, net of tax) for the years ended December 31, 2023, 2022 and 2021, respectively. In 2023, restructuring charges primarily comprised $ 10 million in non-cash impairment charges related to the operating lease right-of-use assets and related property and equipment of certain of our leased and company-owned facilities as discussed further in Note 5 to the accompanying consolidated financial statements, $ 2 million of professional fees and $ 3 million of severance costs. The impairment charges were the result of our decision to exit the leased and company-owned properties. The severance costs related to our continued review and optimization of selling, general and administrative expenses. In 2022, restructuring charges primarily comprised an $ 11 million impairment charge related to our prior corporate headquarters facility operating lease right-of-use asset and leasehold improvements, a $ 2 million impairment of certain internally developed software, $ 1 million of accelerated depreciation related to the early termination of a lease, and $ 6 million of severance and other costs. Severance costs of $ 2 million related to a reduction in workforce of seven percent as part of our completed strategic review of selling and administrative expenses. In 2021, restructuring charges primarily comprised $ 1 million of accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities and $ 1 million of severance and other costs. The pre-tax charges discussed above are included in restructuring charges in the accompanying consolidated statements of operations and comprehensive income. As of December 31, 2022, there were $ 2 million of restructuring charges accrued, of which all were paid or otherwise settled during the year ended December 31, 2023. As of December 31, 2023, there was less than $ 1 million in accrued restructuring charges in the accompanying consolidated statements of financial position. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Accruals for home warranty claims are made using internal actuarial projections, which are based on current claims and historical claims experience. Accruals are established based on estimates of the ultimate cost to settle claims. Home warranty claims take approximately three months to settle, on average, and substantially all claims are settled within six months of incurrence. The amount of time required to settle a claim can vary based on a number of factors, including whether a replacement is ultimately required. In addition to our estimates, we engage a third-party actuary to perform an accrual analysis utilizing generally accepted actuarial methods that incorporate cumulative historical claims experience and information provided by us. We regularly review our estimates of claims costs along with the third-party analysis and adjust our estimates when appropriate. We believe that utilizing actuarial methods in our estimation process to account for these liabilities provides a consistent and effective way to measure these judgmental accruals. We have certain liabilities with respect to existing or potential claims, lawsuits and other proceedings. We accrue for these liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. Due to the nature of our business activities, we are also at times subject to pending and threatened legal and regulatory actions that arise out of the ordinary course of business. In the opinion of management, based in part upon advice of legal counsel, the disposition of any such matters is not expected, individually or in the aggregate, to have a material adverse effect on our business, financial position, results of operations or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that our business, financial position, results of operations or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 9. Stock-Based Compensation The Omnibus Plan permits the grant to certain employees, consultants and non-employee directors of Frontdoor different forms of awards, including stock options, performance options, RSUs, performance shares, RSAs and deferred share equivalents. Upon adoption, 14,500,000 shares were reserved for grants under the Omnibus Plan. Our compensation committee determines the long-term incentive mix of awards to our employees and may authorize new grants annually. As of December 31, 2023, 9,679,691 shares remain available for future grants. Stock Options Stock options are exercisable based on the terms outlined in the applicable award agreement and generally vest over a period of four years . The grant date fair value of stock options is determined using the Black-Scholes option pricing model with the assumptions noted in the following table. A historical daily measurement of volatility is determined based on our and our peer companies’ average volatility. The risk-free interest rate is determined by reference to the outstanding U.S. Treasury note with a term equal to the expected life of the option granted. The expected life represents the period of time that options are expected to be outstanding and was calculated using the simplified approach due to our lack of historical experience upon which to estimate the expected lives of the options. Year Ended December 31, Assumption 2023 2022 2020 Expected volatility 54.9 % 50.7 % 54.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected life (in years) 6.1 6.1 6.1 Risk-free interest rate 3.71 % 2.38 % 1.09 % During the years ended December 31, 2023, 2022 and 2021, we granted options to purchase 661,231 shares, 568,623 shares and 271,735 shares of our common stock, respectively, at weighted-average exercise prices of $ 26.67 per share, $ 28.64 per share and $ 54.36 per share, respectively. The weighted-average grant-date fair values of the options granted during the years ended December 31, 2023, 2022 and 2021 were $ 12.49 per share, $ 14.54 per share and $ 27.78 per share, respectively. During the year ended December 31, 2023, we applied a forfeiture assumption of 10 percent per annum in the recognition of the expense related to these options, with the exception of the options held by our CEO for which we applied a forfeiture rate of zero percent. The total intrinsic value of options exercised was $ 1 million, less than $ 1 million and $ 2 million for the years ended December 31, 2023, 2022 and 2021, respectively. A summary of option activity under the Omnibus Plan during the year ended December 31, 2023 is presented below: Weighted- average Weighted- Aggregate Remaining average Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Outstanding as of December 31, 2022 1,188,168 $ 34.63 $ — 7.45 Granted to employees 661,231 26.67 Exercised ( 159,498 ) 26.75 Forfeited ( 244,390 ) 30.78 Expired ( 118,173 ) 38.51 Outstanding as of December 31, 2023 1,327,338 $ 31.97 $ 7 7.79 Exercisable as of December 31, 2023 565,373 36.26 $ 1 6.34 Performance Options Performance options are exercisable based on the terms outlined in the applicable award agreement. The grant date fair value of performance options is determined using a Monte Carlo simulation model . In addition to service conditions, the ultimate number of performance options to be earned depends on the achievement of a market condition prior to the fourth anniversary of the grant date , which is based on a share price target. Performance options granted during the years ended December 31, 2023 and 2022 have a weighted-average service period of approximately 0.8 years and 1.6 years, respectively, from the initial grant date. During the years ended December 31, 2023 and 2022, we granted options to purchase 652,004 and 272,503 shares of our common stock, respectively, with a weighted-average exercise price of $ 26.42 per share and $ 24.74 per share, respectively. The weighted-average grant date fair values of the performance options granted during the years ended December 31, 2023 and 2022 were $ 10.40 per share and $ 11.50 per share, respectively. We did no t issue any performance options under the Omnibus Plan during the year ended December 31, 2021. During the year ended December 31, 2023, we applied a forfeiture assumption of 10 percent per annum in the recognition of the expense related to these performance options, with the exception of the options held by our CEO for which we applied a forfeiture rate of zero percent. No performance options exercised during the years ended December 31, 2023 and 2022. A summary of performance options activity under the Omnibus Plan during the year ended December 31, 2023 is presented below: Weighted- average Performance Grant Date Options Fair Value Outstanding as of December 31, 2022 272,503 $ 11.50 Granted to employees 652,004 10.40 Exercised — — Forfeited ( 157,363 ) 11.07 Outstanding as of December 31, 2023 767,144 $ 10.65 RSUs RSUs vest based on the terms outlined in the applicable award agreement, which is generally over a period of three years . The grant date fair value of RSUs is determined using the closing market price of our common stock on the trading day that immediately precedes the grant date. During the years ended December 31, 2023, 2022 and 2021, we granted 920,369 RSUs, 1,146,733 RSUs and 443,040 RSUs, respectively, with weighted-average grant date fair values of $ 26.60 per unit, $ 28.00 per unit and $ 53.36 per unit, respectively. During the year ended December 31, 2023, we applied a forfeiture assumption of 10 percent per annum in the recognition of the expense related to these RSUs, with the exception of the awards held by our CEO for which we applied a forfeiture rate of zero percent. The total fair value of RSUs vested during the years ended December 31, 2023, 2022 and 2021 was $ 13 million, $ 13 million and $ 10 million, respectively. A summary of RSU activity under the Omnibus Plan during the year ended December 31, 2023 is presented below: Weighted- average Grant Date RSUs Fair Value Outstanding as of December 31, 2022 1,022,970 $ 31.95 Granted to employees 920,369 26.60 Vested ( 400,186 ) 33.50 Forfeited ( 256,980 ) 29.84 Outstanding as of December 31, 2023 1,286,173 $ 28.06 Performance Shares Performance shares vest based on the terms outlined in the applicable award agreement, which is generally over a period of three years . The grant date fair value of performance shares is determined using the closing market price of our common stock on the trading day that immediately precedes the grant date. In addition to service conditions, the ultimate number of performance shares to be earned depends on the achievement of a performance condition, which is based on a revenue target. During the years ended December 31, 2022 and 2021, we granted 285,801 performance shares and 98,017 performance shares, respectively, with a weighted-average grant date fair value of $ 28.03 per share and $ 54.81 per share, respectively. We did not issue any performance shares under the Omnibus Plan during the year ended December 31, 2023. During the year ended December 31, 2023, we applied a forfeiture assumption of 10 percent per annum in the recognition of the expense related to these performance shares, with the exception of the awards held by our CEO for which we applied a forfeiture rate of zero percent. No performance shares vested during the years ended December 31, 2023, 2022 and 2021. A summary of performance share activity under the Omnibus Plan during the year ended December 31, 2023 is presented below: Weighted- average Performance Grant Date Shares Fair Value Outstanding as of December 31, 2022 230,178 $ 31.84 Granted to employees — — Vested — — Forfeited ( 96,686 ) 30.22 Outstanding as of December 31, 2023 133,492 $ 33.01 RSAs In 2019, in connection with the acquisition of Streem, we issued 575,370 RSAs to certain employees of Streem that were not part of the Omnibus Plan. These awards were subject to time-vesting, certain performance milestone-vesting restrictions, continued employment and transfer restrictions. The grant date fair value of these RSAs was determined using the closing market price of our common stock on the trading day that immediately precedes the grant date. During the year ended December 31, 2023, 5,579 RSAs vested and 7,721 RSAs were forfeited, and as of December 31, 2023, there were no remaining shares unvested. ESPP On March 21, 2019, our board of directors approved and recommended for approval by our stockholders the ESPP, which was approved by our stockholders on April 29, 2019 and became effective for offering periods commencing July 1, 2019. The ESPP is intended to qualify for favorable tax treatment under Section 423 of the Code. Under the plan, eligible employees may purchase common stock, subject to IRS limits, during pre-specified offering periods at a discount established by Frontdoor not to exceed 15 percent of the then current fair market value. A maximum of 1,250,000 shares of our common stock are authorized for sale under the plan. During the years ended December 31, 2023, 2022 and 2021, we issued 31,288 shares, 53,353 shares and 44,211 shares, respectively, under the ESPP. There were 1,074,482 shares available for issuance under the ESPP as of December 31, 2023. Stock-based compensation expense We recognized stock-based compensation expense of $ 26 million ($ 22 million, net of tax), $ 22 million ($ 19 million, net of tax) and $ 25 million ($ 19 million, net of tax) for the years ended December 31, 2023, 2022 and 2021, respectively. These charges are included in selling and administrative expenses in the accompanying consolidated statements of operations and comprehensive income. Stock-based compensation expense for stock options, RSUs and RSAs is recognized over the vesting period of the award using a straight-line vesting method, net of estimated forfeitures. In addition, for performance shares with a performance condition, we evaluate the probability of achieving the performance condition at the end of each reporting period and record the related stock-based compensation expense over the service period. For performance shares and performance options with a market condition, the related stock-based compensation expense is recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. As of December 31, 2023, there was $ 32 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, performance options, RSUs, performance shares and RSAs. These costs are expected to be recognized over a weighted-average period of 2.06 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 10. Employee Benefit Plans We currently maintain a defined contribution plan for the benefit of our employees, the Frontdoor, Inc. 401k Plan. Discretionary contributions made on behalf of our employees were $ 4 million for each of the years ended December 31, 2023, 2022 and 2021. These charges are recorded within selling and administrative expenses in the accompanying consolidated statements of operations and comprehensive income. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 11. Long-Term Debt Long-term debt is summarized in the following table: As of December 31, (In millions) 2023 2022 Term Loan A maturing in 2026 (1) $ 226 $ 239 Term Loan B maturing in 2028 (2) 367 370 Revolving Credit Facility maturing in 2026 — — Total debt 593 609 Less current portion ( 17 ) ( 17 ) Total long-term debt $ 577 $ 592 ___________________________________ (1) Term Loan A is presented net of unamortized debt issuance costs of $ 1 million and $ 2 million as of December 31, 2023 and 2022, respectively. (2) Term Loan B is presented net of unamortized debt issuance costs of $ 2 million and $ 3 million as of December 31, 2023 and 2022, respectively, and unamortized discount of $ 1 million as of December 31, 2023 and 2022. Credit Facilities On February 17, 2021, we repaid $ 100 million of the outstanding principal amount of the Prior Term Loan Facility. In connection with the repayment, we recorded a loss on extinguishment of debt of $ 1 million, which included the write-off of debt issuance costs and original issue discount. On June 17, 2021, we entered into the Credit Agreement, providing for the Term Loan A maturing June 17, 2026 , the Term Loan B maturing June 17, 2028 and the Revolving Credit Facility, which terminates June 17, 2026 . The net proceeds of the transaction, together with cash on hand, were used to redeem the remaining outstanding principal amounts of $ 534 million of the Prior Term Loan Facility and $ 350 million of the 2026 Notes at a price of 106.1 %. In addition, the Revolving Credit Facility replaced the Prior Revolving Credit Facility . In connection with the repayments, we recorded a loss on extinguishment of debt of $ 30 million in the second quarter of 2021, which included a “make-whole” redemption premium of $ 21 million on the 2026 Notes and the write-off of $ 9 million of debt issuance costs and original issue discount. The interest rates applicable to the Term Loan A and the Revolving Credit Facility are based on a fluctuating rate of interest based on the Consolidated First Lien Leverage Ratio ( as defined in the Credit Agreement ) and measured by reference to either, at our option, (i) an adjusted SOFR plus a margin range of 1.50 % to 2.00 % per annum or (ii) an alternate base rate plus a margin range of 0.50 % to 1.00 % per annum. The interest rates applicable to the Term Loan B are based on a fluctuating rate of interest measured by reference to either, at our option, (i) an adjusted SOFR plus a margin of 2.25 % per annum or (ii) an alternate base rate plus a margin of 1.25 % per annum. The obligations under the Credit Agreement are guaranteed by certain subsidiaries (collectively, the “Guarantors”) and are secured by substantially all of the material tangible and intangible assets of Frontdoor and the Guarantors, subject to certain customary exceptions. The Revolving Credit Facility provides for senior secured revolving loans and stand-by and other letters of credit. As of December 31, 2023, we had $ 2 million of letters of credit outstanding under our $ 250 million Revolving Credit Facility. The letters of credit are posted in lieu of cash to satisfy regulatory requirements in certain states in which we operate. The Credit Agreement contains covenants that limit or restrict our ability, including the ability of certain of our subsidiaries, to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends) and enter into transactions with affiliates; therefore, from time to time, our ability to draw on the Revolving Credit Facility may be limited. As of December 31, 2023, the available borrowing capacity under the Revolving Credit Facility was $ 248 million. On October 24, 2018, we entered into an interest rate swap contract effective October 31, 2018 that expires on August 16, 2025. The notional amount of the agreement is $ 350 million. Under the terms of the agreement, we will pay a fixed rate of interest of 3.028 percent on the $ 350 million notional amount, and we will receive a floating rate of interest (based on SOFR, subject to a floor of zero percent) on the notional amount. Therefore, during the term of the agreement, the effective interest rate on $ 350 million of the Term Loan Facilities is fixed at a rate of 3.028 percent, plus the incremental borrowing margin of 2.25 percent. In March 2023, in connection with the planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with SOFR as the benchmark rate under the Credit Agreement. This change was effective in March 2023 for the Term Loan A and the Revolving Credit Facility and in June 2023 for the Term Loan B. As of December 31, 2023, we were in compliance with the covenants under the Credit Agreement. Scheduled Debt Payments The following table presents future scheduled debt payments as of December 31, 2023: (In millions) 2024 17 2025 17 2026 205 2027 4 2028 355 Total future scheduled debt payments 598 Less unamortized debt issuance costs ( 3 ) Less unamortized discount ( 1 ) Total debt $ 593 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Note 12. Supplemental Cash Flow Information Supplemental information relating to our accompanying consolidated statements of cash flows is as follows: Year Ended December 31, (In millions) 2023 2022 2021 Cash paid for (received from): Interest expense $ 38 $ 29 $ 46 Interest income ( 16 ) ( 3 ) ( 1 ) Income tax payments, net of refunds 72 26 40 |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2023 | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | Note 13. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and the unrealized gains (losses) on our derivative instrument. We disclose comprehensive income (loss) in the accompanying consolidated statements of operations and comprehensive income and consolidated statements of changes in equity. A summary of the changes in AOCI is as follows: (In millions) Balance as of December 31, 2021 $ ( 18 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount 29 Tax provision (benefit) 7 After-tax amount 23 Amounts reclassified from accumulated other comprehensive income (loss) (1) 4 Net current period other comprehensive income (loss) 27 Balance as of December 31, 2022 8 Other comprehensive income (loss) before reclassifications: Pre-tax amount 4 Tax provision (benefit) 1 After-tax amount 3 Amounts reclassified from accumulated other comprehensive income (loss) (1) ( 5 ) Net current period other comprehensive income (loss) ( 3 ) Balance as of December 31, 2023 $ 6 ___________________________________ (1) Amounts are net of income taxes. See the table below on reclassifications out of AOCI for additional information. A summary of reclassifications out of AOCI is as follows: Year Ended December 31, (In millions) 2023 2022 2021 Gain (loss) on interest rate swap contract (1) $ 7 $ ( 5 ) $ ( 10 ) Impact of income taxes (2) ( 2 ) 1 2 Total reclassifications during the period $ 5 $ ( 4 ) $ ( 8 ) ___________________________________ (1) Included in interest expense in the accompanying consolidated statements of operations and comprehensive income . (2) Included in provision for income taxes in the accompanying consolidated statements of operations and comprehensive income. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | Note 14. Derivative Financial Instruments We currently use a derivative financial instrument to manage risks associated with changes in interest rates by hedging the interest payments on a portion of our variable rate debt through the use of an interest rate swap contract. We do not hold or issue derivative financial instruments for trading or speculative purposes. In designating derivative financial instruments as hedging instruments under accounting standards for derivative instruments, we formally document the relationship between the hedging instrument and the hedged item, as well as the risk management objective and strategy for the use of the hedging instrument. This documentation includes linking the derivatives to forecasted transactions. We assess at the time a derivative contract is entered into, and at least quarterly thereafter, whether the derivative item is effective in offsetting the projected cash flows of the associated forecasted transaction. Our interest rate swap contract is classified as a cash flow hedge, and, as such, it is recorded in the accompanying consolidated statements of financial position as either an asset or liability at fair value, with changes in fair value recorded in AOCI. Cash flows related to the interest rate swap contract are classified as operating activities in the accompanying consolidated statements of cash flows. The effective portion of the gain or loss on our interest rate swap contract is recorded in AOCI. These amounts are reclassified into earnings in the same period or periods during which the hedged forecasted debt interest settlement affects earnings. See Note 15 to the accompanying consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in AOCI and for the amounts reclassified out of AOCI and into earnings during the periods presented. As the underlying forecasted transactions occur during the next 12 months, we estimate the unrealized hedging gain in AOCI expected to be recognized in earnings is $ 4 million, net of tax, as of December 31, 2023. The amounts ultimately reclassified into earnings during the next 12 months will be determined based on the actual interest rates in effect at the time the positions are settled, and as a result, they could differ materially from our estimate noted above. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note 15. Fair Value Measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. The valuation techniques require inputs that we categorize into a three-level hierarchy, from highest to lowest level of observable inputs, as follows: unadjusted quoted prices for identical assets or liabilities in active markets ("Level 1"); direct or indirect observable inputs, including quoted prices or other market data, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets ("Level 2"); and unobservable inputs that require significant judgment for which there is little or no market data ("Level 3"). When multiple input levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement, even though we may have also utilized significant inputs that are more readily observable. The period-end carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these financial instruments. As of December 31, 2023 and 2022, the carrying amounts of our total debt were $ 593 million and $ 609 million, respectively, and the estimated fair values were $ 598 million and $ 613 million, respectively. The fair value of our debt was estimated based on available market prices for the same or similar instruments that are considered significant other observable inputs (Level 2) within the fair value hierarchy and was based on information available to us as of the respective period end dates. We determine the fair value of our interest rate swap contract using a forward interest rate curve obtained from a third-party market data provider. The fair value of the contract is the sum of the expected future settlements between the contract counterparties, discounted to present value. The expected future settlements are determined by comparing the contract interest rate to the expected forward interest rate as of each settlement date and applying the difference between these two rates to the notional amount of debt in the interest rate swap contract. We did not change our valuation techniques for measuring the fair value of any financial assets and liabilities during the year ended December 31, 2023. Transfers between hierarchy levels, if any, are recognized at the end of the reporting period. There were no transfers between hierarchy levels during the year ended December 31, 2023. Our interest rate swap contract is currently our only financial instrument remeasured at fair value on a recurring basis. A summary of the carrying value and fair value of this financial instrument is as follows: Estimated Fair Value Measurements Quoted Significant Prices Other Significant in Active Observable Unobservable Statement of Carrying Markets Inputs Inputs (In millions) Financial Position Location Value (Level 1) (Level 2) (Level 3) As of December 31, 2023: Interest rate swap contract Prepaid expenses and other current assets $ 5 $ — $ 5 $ — Other assets 2 — 2 — Total assets $ 7 $ — $ 7 $ — As of December 31, 2022: Interest rate swap contract Prepaid expenses and other current assets $ 6 $ — $ 6 $ — Other assets 4 — 4 — Total assets $ 10 $ — $ 10 $ — |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2023 | |
Capital Stock [Abstract] | |
Capital Stock | Note 16. Capital Stock We are authorized to issue 2,000,000,000 shares of common stock. As of December 31, 2023, there were 86,553,387 shares of common stock issued and 78,378,511 shares of common stock outstanding. As of December 31, 2022, there were 86,079,773 shares of common stock issued and 81,517,243 shares of common stock outstanding. We have no other classes of equity securities issued or outstanding. |
Share Repurchase Program
Share Repurchase Program | 12 Months Ended |
Dec. 31, 2023 | |
Share Repurchase Program [Abstract] | |
Share Repurchase Program | Note 17. Share Repurchase Program On September 7, 2021, we announced a three-year repurchase authorization of up to $ 400 million of outstanding shares of our common stock over the three-year period from September 3, 2021 through September 3, 2024. As of December 31, 2023, we have repurchased a total of 8,082,819 outstanding shares at a cost of $ 281 million, which is included in treasury stock on the accompanying consolidated statements of financial position, and we had $ 119 million remaining available for future repurchases under this program. A summary of repurchases of outstanding shares is as follows: Year Ended December 31, (In millions, except per share data) 2023 2022 Number of shares purchased 3,604,625 1,917,350 Average price paid per share (1) $ 33.29 $ 30.51 Cost of shares purchased (1) $ 120 $ 59 ________________________________ (1) The average price paid per share and the cost of shares purchased are calculated on a trade date basis and exclude associated commissions and taxes of $ 1 million and less than $ 1 million for the years ended December 31, 2023 and 2022, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 18. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, increased to include the number of shares of common stock that would have been outstanding had potentially dilutive shares of common stock been issued. The dilutive effect of stock options, performance options, RSUs , performance shares and RSAs are reflected in diluted earnings per share by applying the treasury stock method. A summary of the calculations of our basic and diluted earnings per share is as follows: Year Ended December 31, (In millions, except per share data) 2023 2022 2021 Net Income $ 171 $ 71 $ 128 Weighted-average common shares outstanding 80.5 81.8 85.1 Effect of dilutive securities: RSUs (1) 0.3 0.1 0.2 Stock options (2) — — 0.2 Weighted-average common shares outstanding - assuming dilution: 80.9 82.0 85.5 Basic earnings per share $ 2.13 $ 0.87 $ 1.51 Diluted earnings per share $ 2.12 $ 0.87 $ 1.50 ___________________________________ (1) RSUs of 507,005 shares, 769,704 shares and 204,339 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. (2) Stock options to purchase 1,276,776 shares, 1,357,963 shares and 659,347 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. Performance options to purchase 646,230 shares and 159,769 shares for the years ended December 31, 2023 and 2022, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were no performance options for the year ended December 31, 2021. |
Schedule I Frontdoor, Inc (Pare
Schedule I Frontdoor, Inc (Parent Company Only) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule I Frontdoor, Inc. (Parent Company Only) [Abstract] | |
Schedule I Frontdoor, Inc. (Parent Company Only) | SCHEDULE I Frontdoor, Inc. (Parent Company Only) Condensed Statements of Operations and Comprehensive Income (In millions) Year Ended December 31, 2023 2022 2021 Revenue $ — $ — $ — Interest expense 40 31 39 Interest and net investment income ( 4 ) — — Loss on extinguishment of debt — — 31 Loss before Income Taxes ( 35 ) ( 31 ) ( 70 ) Provision for income taxes 2 1 1 Net Loss from Operations ( 38 ) ( 32 ) ( 71 ) Equity in earnings of subsidiaries, net of tax 209 104 199 Net Income $ 171 $ 71 $ 128 Other Comprehensive (Loss) Income, Net of Income Taxes: Unrealized (loss) gain on derivative instruments, net of income taxes ( 3 ) 27 15 Total Other Comprehensive (Loss) Income, Net of Income Taxes ( 3 ) 27 15 Comprehensive Income $ 169 $ 98 $ 143 See accompanying Notes to the Condensed Financial Statements. Frontdoor, Inc. (Parent Company Only) Condensed Statements of Financial Position (In millions) As of December 31, 2023 2022 Assets: Current Assets: Cash and cash equivalents $ 39 $ 1 Prepaid expenses and other current assets 5 6 Total Current Assets 44 7 Other Assets: Investments in subsidiaries 874 1,268 Other assets 3 6 Total Assets $ 921 $ 1,281 Liabilities and Shareholders' Equity: Current Liabilities: Accounts payable $ — $ 8 Other accrued liabilities 11 9 Current portion of long-term debt 17 17 Total Current Liabilities 28 34 Long-Term Debt 577 592 Due to Subsidiaries 178 592 Other Long-Term Liabilities: Deferred tax liabilities, net 2 2 Other long-term liabilities 2 — Total Other Long-Term Liabilities 3 2 Shareholders' Equity 136 61 Total Liabilities and Shareholders' Equity $ 921 $ 1,281 See accompanying Notes to the Condensed Financial Statements. Frontdoor, Inc. (Parent Company Only) Condensed Statements of Cash Flows (In millions) Year Ended December 31, 2023 2022 2021 Cash and Cash Equivalents at Beginning of Period $ 1 $ 2 $ 72 Net Cash Provided Used for Operating Activities ( 42 ) ( 25 ) ( 32 ) Cash Flows from Financing Activities: Borrowings of debt, net of discount — — 638 Repayments of debt ( 17 ) ( 17 ) ( 994 ) Debt issuance cost paid — — ( 8 ) Call premium paid on retired debt — — ( 21 ) Net transfers to Parent Company 216 102 450 Repurchase of common stock ( 121 ) ( 59 ) ( 103 ) Other financing activities 1 ( 2 ) ( 1 ) Net Cash Provided from (Used for) Financing Activities 80 24 ( 38 ) Cash Increase (Decrease) During the Period 38 ( 1 ) ( 70 ) Cash and Cash Equivalents at End of Period $ 39 $ 1 $ 2 See accompanying Notes to the Condensed Financial Statements. Frontdoor, Inc. (Parent Company Only) Notes to the Condensed Financial Statements Note 1. Basis of Presentation The condensed financial statements of Frontdoor, Inc. (“Parent Company”) are required as a result of the restricted net assets of the Parent Company’s consolidated subsidiaries exceeding 25 percent of the Parent Company’s consolidated net assets as of December 31, 2023. All consolidated subsidiaries of the Parent Company are wholly owned. The primary source of income for the Parent Company is equity in its subsidiaries’ earnings. Pursuant to rules and regulations of the SEC, the unconsolidated condensed financial statements of the Parent Company do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP. Therefore, these condensed financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in this Annual Report on Form 10-K. The Parent Company has accounted for its subsidiaries using the equity method of accounting in these condensed financial statements. Note 2. Long-Term Debt On February 17, 2021, we repaid $ 100 million of the outstanding principal amount of the Prior Term Loan Facility. In connection with the repayment, we recorded a loss on extinguishment of debt of $ 1 million, which included the write-off of debt issuance costs and original issue discount. On June 17, 2021, we entered into the Credit Agreement, providing for the Term Loan A maturing June 17, 2026, the Term Loan B maturing June 17, 2028 and the Revolving Credit Facility, which terminates June 17, 2026. The net proceeds of the transaction, together with cash on hand, were used to redeem the remaining outstanding principal amounts of $ 534 million of the Prior Term Loan Facility and $ 350 million of the 2026 Notes at a price of 106.1 %. In addition, the Revolving Credit Facility replaced the Prior Revolving Credit Facility. In connection with the repayments, we recorded a loss on extinguishment of debt of $ 30 million in the second quarter of 2021, which included a “make-whole” redemption premium of $ 21 million on the 2026 Notes and the write-off of $ 9 million of debt issuance costs and original issue discount. For the years ended December 31, 2023, 2022 and 2021, Parent Company’s debt and corresponding interest expense were not allocated to its subsidiaries. American Home Shield is a co-obligor and/or guarantor of the debt, and interest expense has been pushed down to American Home Shield for income tax purposes. For further information on the Parent Company’s financing transactions, see Note 11 to the audited consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Note 3. Supplemental Non-Cash Information The Parent Company entered into certain non-cash transactions with subsidiaries as follows, which have been excluded from the condensed statements of cash flows: Year Ended December 31, (In millions) 2023 2022 2021 Settlement of amounts due to subsidiaries $ ( 605 ) $ — $ — Dividend from subsidiaries 605 — — Note 4. Share Repurchase Program On September 7, 2021, we announced a three-year repurchase authorization of up to $ 400 million of outstanding shares of our common stock over the three-year period from September 3, 2021 through September 3, 2024. As of December 31, 2023, we have repurchased a total of 8,082,819 outstanding shares at a cost of $ 281 million, and we had $ 119 million remaining available for future repurchases under this program. For further information on the Parent Company’s share repurchases, see Note 17 to the audited consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2023 | |
Schedule II Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | SCHEDULE II Frontdoor, Inc. Valuation and Qualifying Accounts (In millions ) Additions Balance at Charged to Balance at Beginning of Costs and End of Period Expenses Deductions (1) Period As of and for the year ended December 31, 2023 Allowance for doubtful accounts: Accounts receivable $ 4 $ 22 $ 21 $ 5 Income tax valuation allowance — 1 — 1 As of and for the year ended December 31, 2022 Allowance for doubtful accounts: Accounts receivable $ 4 $ 19 $ 18 $ 4 Income tax valuation allowance 1 — 1 — As of and for the year ended December 31, 2021 Allowance for doubtful accounts: Accounts receivable $ 2 $ 18 $ 17 $ 4 Income tax valuation allowance 2 — 1 1 ___________________________________ (1) Deductions to the allowance for doubtful accounts for accounts receivable reflect write-offs of uncollectible accounts. Deductions to the income tax valuation allowance are primarily attributable to the reduction in net operating loss carryforwards and other deferred tax assets related to the uncertainty of future taxable income in certain jurisdictions. |
Significant Accounting Polici_2
Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Consolidation | Consolidation Our consolidated financial statements include all of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements requires management to make certain estimates and assumptions required under U.S. GAAP that may differ from actual results. The more significant areas requiring the use of management estimates relate to: revenue recognition; home warranty claims accruals; the valuation of property and equipment, goodwill and intangible assets; useful lives for recognizing depreciation and amortization expense; accruals for current and deferred tax accounts; stock-based compensation expense; and litigation matters. |
Revenue | Revenue The majority of our revenue is generated from annual home warranty contracts entered into with our customers. Home warranty contracts are typically one year in duration. Home warranty claims costs are expensed as incurred. We recognize revenue over the life of these contracts in proportion to the expected direct costs. Those costs bear a direct relationship to the fulfillment of our obligations under the contracts and are representative of the relative value provided to our customers. We regularly review our estimates of claims costs and adjust our estimates when appropriate. Revenues are presented net of sales taxes collected and remitted to government taxing authorities in the accompanying consolidated statements of operations and comprehensive income. We record a receivable due from customers once we have an unconditional right to invoice and receive payment in the future related to the services provided and anticipate the collection of amounts due to us. We invoice our monthly-pay customers on a straight-line basis over the contract term. As a result, contract assets arise when we recognize revenue for our home warranty contracts prior to a customer being invoiced. Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable. Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts. |
Property and Equipment, Goodwill and Intangible Assets | Property and Equipment, Goodwill and Intangible Assets Property and equipment consist of the following: As of Estimated December 31, Useful Lives (In millions) 2023 2022 (Years) Buildings and improvements $ 4 $ 14 10 - 40 Technology and communications 159 130 3 - 7 Office equipment, furniture and fixtures, and vehicles 3 11 5 - 7 166 155 Less accumulated depreciation ( 105 ) ( 89 ) Property and equipment, net $ 60 $ 66 Depreciation of property and equipment was $ 32 million, $ 27 million and $ 24 million for the years ended December 31, 2023, 2022 and 2021, respectively. Property and equipment are recorded at cost. Property and equipment and intangible assets with finite lives are depreciated on a straight-line basis over their estimated useful lives. These lives are based on our previous experience for similar assets, potential market obsolescence and other industry and business data. Property and equipment and finite-lived intangible assets are tested for recoverability if circumstances indicate a potential impairment. If the carrying amount is no longer recoverable based upon the undiscounted future cash flows of the asset, an impairment loss would be recognized equal to the difference between the carrying amount and the fair value of the asset. Changes in the estimated useful lives could cause us to adjust the carrying values or future expense accordingly. Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment on an annual basis, or more frequently if circumstances indicate a potential impairment. We perform our annual assessment for impairment on October 1 of every year. Goodwill and indefinite-lived intangible assets are tested for impairment at the reporting unit level. The Company can elect to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the reporting unit does not pass the qualitative assessment, or if the Company does not elect to perform the initial qualitative assessment, then the reporting unit’s carrying amount is compared to its fair value. The fair values of the reporting units are estimated using market and discounted cash flow approaches. The discounted cash flow approach uses expected future operating results. The market approach uses comparable company information to determine revenue and earnings multiples to value our reporting units. Failure to achieve these expected results or market multiples may cause a future impairment of goodwill at the reporting unit. Goodwill and indefinite-lived intangible assets are considered impaired if the carrying amount of the reporting unit exceeds its fair value. See Note 4 to the accompanying consolidated financial statements for information related to our goodwill and intangible assets. |
Advertising | Advertising We expense advertising costs as incurred. Advertising expense for the years ended December 31, 2023, 2022 and 2021 was $ 156 million, $ 115 million and $ 106 million, respectively. |
Leases | Leases We determine if an arrangement is a lease at inception. We recognize a right-of-use (“ROU”) asset and lease liability for all leases with terms of 12 months or more. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Our incremental borrowing rate is determined based on our secured borrowing rating and the lease term. Our operating lease ROU assets are recorded net of lease incentives. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for separately for our real estate leases. See Note 5 to the accompanying consolidated financial statements for information related to our leases. |
Restricted Net Assets | Restricted Net Assets There are regulatory restrictions on the ability of certain of our subsidiaries to transfer funds to us. The payments of ordinary and extraordinary dividends by our subsidiaries are subject to significant regulatory restrictions under the laws and regulations of the states in which they operate. Among other things, such laws and regulations require certain subsidiaries to maintain minimum capital and net worth requirements and may limit the amount of ordinary and extraordinary dividends and other payments that these subsidiaries can make to us. As of December 31, 2023, the total net assets subject to these regulatory restrictions was $ 157 million. |
Financial Instruments and Credit Risk | Financial Instruments and Credit Risk We hedge the interest payments on a portion of our variable rate debt through the use of an interest rate swap contract. We have classified our interest rate swap contract as a cash flow hedge and recorded the hedging instrument in the consolidated statements of financial position as either an asset or liability at fair value. The effect of derivative financial instrument transactions could have a material impact on our financial statements. We do not hold or issue derivative financial instruments for trading or speculative purposes. Financial instruments, which potentially subject us to financial and credit risk, consist principally of receivables. The majority of our receivables have little concentration of credit risk due to the large number of customers with relatively small balances and their dispersion across geographical areas. We maintain an allowance for losses based upon the expected collectability of receivables. See Note 15 to the accompanying consolidated financial statements for information relating to the fair value of financial instruments. |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Stock-based compensation expense for stock options is estimated at the grant date based on an award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense over the requisite service period. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for future grants may differ materially from that recorded in the current period related to options granted to date. In addition, we estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. We estimate the forfeiture rate based on historical experience. To the extent the actual forfeiture rate is different from the estimate, stock-based compensation expense is adjusted accordingly in the period the forfeiture occurs or the awards vest. See Note 9 to the accompanying consolidated financial statements for more details, including the calculation of stock-based compensation expense for stock options, performance options, RSUs, performance shares and RSAs. |
Income Taxes | Income Taxes Frontdoor files a consolidated U.S. federal income tax return. State and local returns are filed both on a separate company basis and on a combined unitary basis with Frontdoor. Current and deferred income taxes are provided for on a separate company basis. We account for income taxes using an asset and liability approach for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income during the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when management determines that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The financial effect of changes in tax laws or rates is accounted for in the period of enactment. We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in tax returns. We recognize potential interest and penalties related to unrecognized tax benefits as income tax expense. |
Segment Reporting | Segment Reporting We are required to report annual and interim financial and descriptive information about our reportable operating segments. We operate our business under six brand names that primarily engage in the activity of providing home warranties to our customers. Our chief operating decision maker, who is our Chief Executive Officer, regularly evaluates financial information on a consolidated basis in deciding how to allocate resources and in assessing performance. As such, we operate as one operating segment, which is comprised of our six brands, and we have one reportable segment. |
Newly Adopted Accounting Standards | Newly Issued Accounting Standards In 2020, the FASB issued ASU 2020-04 , Reference Rate Reform (Topic 848), which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The sunset provision was set for December 31, 2022. In 2022, the FASB issued ASU 2022-06, which defers the sunset date to December 31, 2024, after which entities will no longer be permitted to apply the relief in in Topic 848. In March 2023, in connection with the planned phase-out of LIBOR, we amended our Credit Facilities to replace LIBOR with SOFR as the benchmark rate under the Credit Agreement. We adopted ASU 2020-04 in connection with this transition of the benchmark rate under our Credit Agreement. This transition did not have a material impact on our consolidated financial statements and related disclosures. In 2023, the FASB issued ASU 2023-07 , Segment Reporting (Topic 280), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the guidance should be applied retrospectively to all periods presented in the financial statements, unless it is impracticable. We intend to adopt the provisions of this guidance in conjunction with our 2024 Annual Report on Form 10-K for the year ended December 31, 2024. In 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740), which improves income tax disclosure requirements, primarily through enhanced disclosures related to the rate reconciliation and income taxes paid information. This guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted, and the guidance should be applied on a prospective basis. Retrospective application is permitted. We intend to adopt the provisions of this guidance in conjunction with our 2024 Annual Report on Form 10-K for the year ended December 31, 2024. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Schedule of Property and Equipment | As of Estimated December 31, Useful Lives (In millions) 2023 2022 (Years) Buildings and improvements $ 4 $ 14 10 - 40 Technology and communications 159 130 3 - 7 Office equipment, furniture and fixtures, and vehicles 3 11 5 - 7 166 155 Less accumulated depreciation ( 105 ) ( 89 ) Property and equipment, net $ 60 $ 66 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue [Abstract] | |
Disaggregation of Revenue from Contracts with Customers | Year Ended December 31, (In millions) 2023 2022 2021 Renewals $ 1,367 $ 1,203 $ 1,103 Real estate (1) 141 184 252 Direct-to-consumer (1) 194 219 201 Other 77 56 46 Total $ 1,780 $ 1,662 $ 1,602 _____________________________ (1) First-year revenue only. |
Change in Deferred Revenue | (In millions) Balance as of December 31, 2022 $ 121 Deferral of revenue 229 Recognition of deferred revenue ( 248 ) Balance as of December 31, 2023 $ 102 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of Other Intangible Asset Balances | As of December 31, 2023 2022 Accumulated Accumulated (In millions) Gross Amortization Net Gross Amortization Net Trade names (1) $ 141 $ — $ 141 $ 141 $ — $ 141 Customer relationships 173 ( 173 ) — 173 ( 172 ) — Developed technology 19 ( 17 ) 2 19 ( 13 ) 5 Other 32 ( 32 ) — 32 ( 31 ) 1 Total $ 365 $ ( 221 ) $ 143 $ 365 $ ( 217 ) $ 148 ___________________________________ (1) Not subject to amortization. |
Schedule of Expected Amortization Expense for Intangible Assets | (In millions) 2024 $ 2 2025 — 2026 — 2027 — 2028 — Total $ 3 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Weighted Average Remaining Lease Term and Discount Rate | As of December 31, 2023 2022 Weighted-average remaining lease term (years) 9 9 Weighted-average discount rate 6.5 % 6.3 % |
Supplemental Balance Sheet Information Related to Leases | As of December 31, (In millions) 2023 2022 Other accrued liabilities $ 2 $ 3 Operating lease liabilities 16 18 Total operating lease liabilities $ 18 $ 21 |
Supplemental Cash Flow Related to Leases | Year Ended December 31, (In millions) 2023 2022 2021 Cash paid on operating lease liabilities (1) $ 4 $ 5 $ 5 Leased assets obtained in exchange for new lease liabilities — 3 6 ___________________________________ (1) Amount is presented net of cash provided from sublease income. |
Maturities of Lease Liabilities | : (In millions) 2024 (1) 2 2025 (1) 2 2026 (1) 2 2027 3 2028 2 Thereafter 10 Total future lease payments (1) 21 Less imputed interest ( 6 ) Total operating lease liabilities (1) $ 15 ___________________________________ (1) Amount is presented net of future sublease income totaling $ 3 million, which relates to the years ending December 31, 2024 through December 31, 2026. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes [Abstract] | |
Reconciliation of Unrecognized Tax Benefits | (In millions) Balance as of December 31, 2021 $ 7 Increases in tax positions for current year 1 Balance as of December 31, 2022 8 Decreases in tax positions for current year ( 2 ) Balance as of December 31, 2023 $ 5 |
Reconciliation of Effective Income Tax Rate | Year Ended December 31, 2023 2022 2021 Tax at U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of U.S. federal benefit 2.4 0.7 3.1 Other permanent items 0.9 ( 0.2 ) ( 0.3 ) Stock-based compensation 1.2 2.2 0.5 Goodwill impairment — 2.0 — Tax Credits ( 0.7 ) ( 3.2 ) ( 1.9 ) Uncertain tax positions 0.2 1.3 1.1 Effective rate 25.0 % 23.8 % 23.4 % |
Income Tax Expense from Continuing Operations | Year Ended December 31, (In millions) 2023 2022 2021 Current: U.S. federal $ 60 $ 28 $ 33 State and local 10 4 7 70 32 41 Deferred: U.S. federal ( 11 ) ( 7 ) ( 1 ) State and local ( 3 ) ( 2 ) — ( 13 ) ( 10 ) ( 2 ) Provision for income taxes $ 57 $ 22 $ 39 |
Deferred Tax Balances | As of December 31, (In millions) 2023 2022 Long-term deferred tax assets (liabilities): Intangible assets $ ( 45 ) $ ( 45 ) Property and equipment 4 ( 3 ) Deferred customer acquisition costs ( 3 ) ( 4 ) Prepaid expenses and other assets ( 2 ) ( 2 ) Operating lease right-of-use assets ( 1 ) ( 2 ) Receivables allowances 1 1 Accrued liabilities 9 5 Other long-term liabilities 7 7 Operating lease liabilities 4 5 Deferred interest expense ( 2 ) ( 2 ) Net operating loss and tax credit carryforwards 2 2 Valuation allowance ( 1 ) — Net long-term deferred tax liabilities $ ( 25 ) $ ( 39 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used to Estimate Value of Each Option Award | Year Ended December 31, Assumption 2023 2022 2020 Expected volatility 54.9 % 50.7 % 54.1 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected life (in years) 6.1 6.1 6.1 Risk-free interest rate 3.71 % 2.38 % 1.09 % |
Summary of Awards Granted | Weighted- average Weighted- Aggregate Remaining average Intrinsic Contractual Stock Exercise Value Term Options Price (in millions) (in years) Outstanding as of December 31, 2022 1,188,168 $ 34.63 $ — 7.45 Granted to employees 661,231 26.67 Exercised ( 159,498 ) 26.75 Forfeited ( 244,390 ) 30.78 Expired ( 118,173 ) 38.51 Outstanding as of December 31, 2023 1,327,338 $ 31.97 $ 7 7.79 Exercisable as of December 31, 2023 565,373 36.26 $ 1 6.34 |
Summary of RSU Activity Under Omnibus Plan | Weighted- average Grant Date RSUs Fair Value Outstanding as of December 31, 2022 1,022,970 $ 31.95 Granted to employees 920,369 26.60 Vested ( 400,186 ) 33.50 Forfeited ( 256,980 ) 29.84 Outstanding as of December 31, 2023 1,286,173 $ 28.06 |
Performance Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Performance Activity | Weighted- average Performance Grant Date Options Fair Value Outstanding as of December 31, 2022 272,503 $ 11.50 Granted to employees 652,004 10.40 Exercised — — Forfeited ( 157,363 ) 11.07 Outstanding as of December 31, 2023 767,144 $ 10.65 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary Of Performance Activity | Weighted- average Performance Grant Date Shares Fair Value Outstanding as of December 31, 2022 230,178 $ 31.84 Granted to employees — — Vested — — Forfeited ( 96,686 ) 30.22 Outstanding as of December 31, 2023 133,492 $ 33.01 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Long-Term Debt [Abstract] | |
Schedule of Long-Term Debt | As of December 31, (In millions) 2023 2022 Term Loan A maturing in 2026 (1) $ 226 $ 239 Term Loan B maturing in 2028 (2) 367 370 Revolving Credit Facility maturing in 2026 — — Total debt 593 609 Less current portion ( 17 ) ( 17 ) Total long-term debt $ 577 $ 592 ___________________________________ (1) Term Loan A is presented net of unamortized debt issuance costs of $ 1 million and $ 2 million as of December 31, 2023 and 2022, respectively. (2) Term Loan B is presented net of unamortized debt issuance costs of $ 2 million and $ 3 million as of December 31, 2023 and 2022, respectively, and unamortized discount of $ 1 million as of December 31, 2023 and 2022. |
Scheduled Debt Payments | (In millions) 2024 17 2025 17 2026 205 2027 4 2028 355 Total future scheduled debt payments 598 Less unamortized debt issuance costs ( 3 ) Less unamortized discount ( 1 ) Total debt $ 593 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Information Relating to the Accompanying Condensed Consolidated Statements of Cash Flows | Year Ended December 31, (In millions) 2023 2022 2021 Cash paid for (received from): Interest expense $ 38 $ 29 $ 46 Interest income ( 16 ) ( 3 ) ( 1 ) Income tax payments, net of refunds 72 26 40 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Comprehensive Income (Loss) [Abstract] | |
Summary of the Activity in AOCI, Net of the Related Tax Effects | (In millions) Balance as of December 31, 2021 $ ( 18 ) Other comprehensive income (loss) before reclassifications: Pre-tax amount 29 Tax provision (benefit) 7 After-tax amount 23 Amounts reclassified from accumulated other comprehensive income (loss) (1) 4 Net current period other comprehensive income (loss) 27 Balance as of December 31, 2022 8 Other comprehensive income (loss) before reclassifications: Pre-tax amount 4 Tax provision (benefit) 1 After-tax amount 3 Amounts reclassified from accumulated other comprehensive income (loss) (1) ( 5 ) Net current period other comprehensive income (loss) ( 3 ) Balance as of December 31, 2023 $ 6 ___________________________________ (1) Amounts are net of income taxes. See the table below on reclassifications out of AOCI for additional information. |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | Year Ended December 31, (In millions) 2023 2022 2021 Gain (loss) on interest rate swap contract (1) $ 7 $ ( 5 ) $ ( 10 ) Impact of income taxes (2) ( 2 ) 1 2 Total reclassifications during the period $ 5 $ ( 4 ) $ ( 8 ) ___________________________________ (1) Included in interest expense in the accompanying consolidated statements of operations and comprehensive income . (2) Included in provision for income taxes in the accompanying consolidated statements of operations and comprehensive income. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements [Abstract] | |
Schedule of the Carrying Amount and Estimated Fair Value of the Company's Financial Instruments that are Recorded at Fair Value on a Recurring Basis | Estimated Fair Value Measurements Quoted Significant Prices Other Significant in Active Observable Unobservable Statement of Carrying Markets Inputs Inputs (In millions) Financial Position Location Value (Level 1) (Level 2) (Level 3) As of December 31, 2023: Interest rate swap contract Prepaid expenses and other current assets $ 5 $ — $ 5 $ — Other assets 2 — 2 — Total assets $ 7 $ — $ 7 $ — As of December 31, 2022: Interest rate swap contract Prepaid expenses and other current assets $ 6 $ — $ 6 $ — Other assets 4 — 4 — Total assets $ 10 $ — $ 10 $ — |
Share Repurchase Program (Table
Share Repurchase Program (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share Repurchase Program [Abstract] | |
Purchase Of Outstanding Shares | Year Ended December 31, (In millions, except per share data) 2023 2022 Number of shares purchased 3,604,625 1,917,350 Average price paid per share (1) $ 33.29 $ 30.51 Cost of shares purchased (1) $ 120 $ 59 ________________________________ (1) The average price paid per share and the cost of shares purchased are calculated on a trade date basis and exclude associated commissions and taxes of $ 1 million and less than $ 1 million for the years ended December 31, 2023 and 2022, respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | A summary of the calculations of our basic and diluted earnings per share is as follows: Year Ended December 31, (In millions, except per share data) 2023 2022 2021 Net Income $ 171 $ 71 $ 128 Weighted-average common shares outstanding 80.5 81.8 85.1 Effect of dilutive securities: RSUs (1) 0.3 0.1 0.2 Stock options (2) — — 0.2 Weighted-average common shares outstanding - assuming dilution: 80.9 82.0 85.5 Basic earnings per share $ 2.13 $ 0.87 $ 1.51 Diluted earnings per share $ 2.12 $ 0.87 $ 1.50 ___________________________________ (1) RSUs of 507,005 shares, 769,704 shares and 204,339 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. (2) Stock options to purchase 1,276,776 shares, 1,357,963 shares and 659,347 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. Performance options to purchase 646,230 shares and 159,769 shares for the years ended December 31, 2023 and 2022, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were no performance options for the year ended December 31, 2021. |
Description of Business (Narrat
Description of Business (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2023 item | |
Number of active home service plans | 2,000,000 |
Minimum [Member] | |
Number of systems or appliances covered under service plans | 20 |
Significant Accounting Polici_4
Significant Accounting Policies (Narrative) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) item segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Significant Accounting Policies [Abstract] | |||
Home service plans, typical term | 1 year | ||
Recognition requirements lease term | 12 months | ||
Advertising expense | $ 156 | $ 115 | $ 106 |
Depreciation of property and equipment, including depreciation of assets held under finance leases | $ 32 | 27 | $ 24 |
Number Of Brands The Business Operate Under | item | 6 | ||
Number of Operating Segments | segment | 1 | ||
Number of Reportable Segments | segment | 1 | ||
Goodwill and trade name impairment | $ 14 | ||
Amount of Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries | $ 157 |
Significant Accounting Polici_5
Significant Accounting Policies (Schedule of Property and Equipment) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 166 | $ 155 |
Less accumulated depreciation | (105) | (89) |
Property and equipment, net | 60 | 66 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 4 | 14 |
Buildings and improvements | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Buildings and improvements | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 40 years | |
Technology and communications | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 159 | 130 |
Technology and communications | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Technology and communications | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years | |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross Property and equipment | $ 3 | $ 11 |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Office Equipment, Furniture and Fixtures, and Vehicles [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 7 years |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue [Abstract] | |||
Deferred customer acquisition costs | $ 12,000,000 | $ 16,000,000 | |
Amortization of deferred customer acquisition costs | 16,000,000 | 19,000,000 | $ 19,000,000 |
Impairment losses related to capitalized costs | 0 | $ 0 | $ 0 |
Contract assets | 0 | ||
Revenue recognized | $ 117,000,000 |
Revenue (Disaggregation of Reve
Revenue (Disaggregation of Revenue from Contracts with Customers) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 1,780 | $ 1,662 | $ 1,602 | |
Renewals [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | 1,367 | 1,203 | 1,103 | |
Real Estate [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | [1] | 141 | 184 | 252 |
Direct-To-Consumer [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | [1] | 194 | 219 | 201 |
Revenue, Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Reportable segment revenues | $ 77 | $ 56 | $ 46 | |
[1] First-year revenue only. |
Revenue (Change in Deferred Rev
Revenue (Change in Deferred Revenue) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Revenue [Abstract] | |
Balance at beginning of period | $ 121 |
Deferral of revenue | 229 |
Recognition of deferred revenue | (248) |
Balance at end of period | $ 102 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets [Abstract] | ||||
Impairment charges | $ 14 | |||
Goodwill | $ 503 | $ 503 | ||
Goodwill impairment charges | 9 | |||
Intangible asset impairment charges | $ 5 | 5 | ||
Amortization expense | $ 4 | $ 7 | $ 11 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Schedule of Other Intangible Asset Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | |
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | $ 365 | $ 365 | |
Accumulated Amortization | (221) | (217) | |
Net | 143 | 148 | |
Customer Relationships [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 173 | 173 | |
Accumulated Amortization | (173) | (172) | |
Developed Technology [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 19 | 19 | |
Accumulated Amortization | (17) | (13) | |
Net | 2 | 5 | |
Other [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | 32 | 32 | |
Accumulated Amortization | (32) | (31) | |
Net | 1 | ||
Trade Names [Member] | |||
Finite Lived and Indefinite Lived Intangible Assets by Major Class [Line Items] | |||
Gross | [1] | 141 | 141 |
Net | [1] | $ 141 | $ 141 |
[1] Not subject to amortization. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Schedule of Expected Amortization Expense for Intangible Assets) (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets [Abstract] | |
2024 | $ 2 |
Total | $ 3 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Lessee, Lease, Description [Line Items] | ||||
Leases, Renewal Term | 5 years | |||
Lease payments | [1] | $ 21 | ||
2024 | 2 | |||
Operating lease, impairment loss | 10 | $ 11 | ||
Operating lease expense | 3 | 4 | $ 4 | |
Scottsdale, Arizona [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease payments | 8 | |||
2024 | 1 | |||
Lease payments, 2025-2033 | 7 | |||
Operating lease, impairment loss | $ 5 | |||
Term of contract | 10 years | |||
Memphis, Tennessee [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease, impairment loss | $ 11 | |||
Maximum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Leases, Remaining Lease Term Years | 11 years | |||
Minimum [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Leases, Remaining Lease Term Years | 1 year | |||
[1] Amount is presented net of future sublease income totaling $ 3 million, which relates to the years ending December 31, 2024 through December 31, 2026. |
Leases (Weighted Average Remain
Leases (Weighted Average Remaining Lease Term and Discount Rate) (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term (years) | 9 years | 9 years |
Weighted-average discount rate | 6.50% | 6.30% |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Other accrued liabilities | $ 2 | $ 3 |
Operating lease liabilities | 16 | 18 |
Total operating lease liabilities | $ 18 | $ 21 |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Related to Leases) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Leases [Abstract] | ||||
Cash paid on operating lease liabilities | [1] | $ 4 | $ 5 | $ 5 |
Leased assets obtained in exchange for new lease liabilities | $ 3 | $ 6 | ||
[1] Amount is presented net of cash provided from sublease income. |
Leases (Maturities of Lease Lia
Leases (Maturities of Lease Liabilities) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) | ||
Leases [Abstract] | ||
2024 | $ 2 | |
2025 | 2 | |
2026 | 2 | |
2027 | 3 | |
2028 | 2 | |
Thereafter | 10 | |
Total future lease payments | 21 | [1] |
Less imputed interest | (6) | |
Total operating lease liabilities | 15 | [1] |
Projected annual sublease income | $ 3 | |
[1] Amount is presented net of future sublease income totaling $ 3 million, which relates to the years ending December 31, 2024 through December 31, 2026. |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Tax Credit Carryforward [Line Items] | |||
Unrecognized tax benefits | $ 5 | $ 8 | $ 7 |
Maximum [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Accrued interest and penalties | $ 1 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | ||
Balance at beginning of year | $ 8 | $ 7 |
Increases in tax positions for current year | 1 | |
Decrease in tax positions for current year | (2) | |
Balance at ending on year | $ 5 | $ 8 |
Income Taxes (Reconciliation _2
Income Taxes (Reconciliation of Effective Income Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to the entity's effective income tax rate for continuing operations | |||
Tax at U.S. federal statutory rate (as a percent) | 21% | 21% | 21% |
State and local income taxes, net of U.S. federal benefit (as a percent) | 2.40% | 0.70% | 3.10% |
Other permanent items | 0.90% | (0.20%) | (0.30%) |
Stock-based compensation (as a percent) | 1.20% | 2.20% | 0.50% |
Goodwill impairment (as a percent) | 2% | ||
Tax Credits (as a percent) | (0.70%) | (3.20%) | (1.90%) |
Uncertain tax positions (as a percent) | 0.20% | 1.30% | 1.10% |
Effective rate (as a percent) | 25% | 23.80% | 23.40% |
Income Taxes (Income Tax Expens
Income Taxes (Income Tax Expense from Continuing Operations) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
U.S. federal | $ 60 | $ 28 | $ 33 |
State and local | 10 | 4 | 7 |
Total current | 70 | 32 | 41 |
Deferred: | |||
U.S. federal | (11) | (7) | (1) |
State and local | (3) | (2) | |
Total deferred | (13) | (10) | (2) |
Provision for income taxes | $ 57 | $ 22 | $ 39 |
Income Taxes (Deferred Tax Bala
Income Taxes (Deferred Tax Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Long-term deferred tax assets (liabilities): | ||
Intangible assets | $ (45) | $ (45) |
Property and equipment | (3) | |
Property and equipment | 4 | |
Deferred customer acquisition costs | (3) | (4) |
Prepaid expenses and other assets | (2) | (2) |
Operating lease right-of-use assets | (1) | (2) |
Receivables allowances | 1 | 1 |
Accrued liabilities | 9 | 5 |
Other long-term liabilities | 7 | 7 |
Operating lease liabilities | 4 | 5 |
Deferred interest expense | (2) | (2) |
Net operating loss and tax credit carryforwards | 2 | 2 |
Valuation allowance | (1) | |
Net long-term deferred tax liabilities | $ (25) | $ (39) |
Restructuring Charges (Narrativ
Restructuring Charges (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 16 | $ 20 | $ 3 |
Restructuring charges, net of tax | 12 | 15 | 2 |
Operating lease, impairment loss | 10 | 11 | |
Lease termination and other costs | 1 | ||
Professional fees | 2 | ||
Severance Costs | $ 3 | 6 | 1 |
Severance cost related to reduction in workforce percentage | 7% | ||
Restructuring charges accrued | $ 1 | 2 | |
Payments for Restructuring | $ 7 | 5 | 2 |
Workforce Reduction [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 2 | ||
Developed Technology [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Impairment charges | $ 2 | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Home service plan claims settlement, term | 6 months |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Home service plan claims settlement, term | 3 months |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | 36 Months Ended | ||||
Mar. 21, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2023 | |
Stock-Based Compensation [Line Items] | ||||||
Number of shares of common stock authorized | 14,500,000 | 14,500,000 | ||||
Number of shares of common stock remaining for future grant | 9,679,691 | 9,679,691 | ||||
Stock-based compensation expense | $ 26 | $ 22 | $ 25 | |||
Stock-based compensation expense, net of tax | 22 | $ 19 | $ 19 | |||
Total unrecognized compensation costs related to non-vested stock options, restricted share units and performance shares | $ 32 | $ 32 | ||||
Weighted-average period of recognition of stock-based compensation cost | 2 years 21 days | |||||
Employee Stock Purchase Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Number of shares of common stock authorized | 1,250,000 | |||||
Number of shares of common stock remaining for future grant | 1,074,482 | 1,074,482 | ||||
Maximum percentage of current fair market value eligible employees may purchase | 15% | |||||
Number of shares of common stock offered | 31,288 | 53,353 | 44,211 | |||
Stock Options [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Vesting period | 4 years | |||||
Stock Options [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Grants (in shares) | 661,231 | 568,623 | 271,735 | |||
Granted (in dollars per share) | $ 26.67 | $ 28.64 | $ 54.36 | |||
Weighted-average grant-date fair value (in dollars per share) | $ 12.49 | $ 14.54 | $ 27.78 | |||
Forfeiture rate (as a percent) | 10% | |||||
Stock Options [Member] | Omnibus Incentive Plan [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0% | |||||
Restricted Stock Units [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted Stock Units [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 10% | |||||
Total intrinsic value of stock options exercised | $ 13 | $ 13 | $ 10 | |||
Granted (in shares) | 920,369 | 1,146,733 | 443,040 | |||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ 26.60 | $ 28 | $ 53.36 | |||
Vested (in shares) | 400,186 | |||||
Forfeited (in shares) | 256,980 | |||||
Unvested (in shares) | 1,286,173 | 1,022,970 | 1,286,173 | |||
Restricted Stock Units [Member] | Omnibus Incentive Plan [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0% | |||||
Performance Options [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Granted (in shares) | 652,004 | 272,503 | 0 | |||
Granted, weighted-average exercise price | 26.42 | 24.74 | ||||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ 10.40 | $ 11.50 | ||||
Forfeited (in shares) | 157,363 | |||||
Unvested (in shares) | 767,144 | 272,503 | 767,144 | |||
Vesting period | 9 months 18 days | 1 year 7 months 6 days | ||||
Performance Shares [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 10% | |||||
Granted (in shares) | 285,801 | 98,017 | ||||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ 28.03 | $ 54.81 | ||||
Vested (in shares) | 0 | |||||
Forfeited (in shares) | 96,686 | |||||
Unvested (in shares) | 133,492 | 230,178 | 133,492 | |||
Vesting period | 3 years | |||||
Performance Shares [Member] | Chief Executive Officer [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Forfeiture rate (as a percent) | 0% | |||||
Restricted Stock [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Granted (in shares) | 575,370 | |||||
Vested (in shares) | 5,579 | |||||
Forfeited (in shares) | 7,721 | |||||
Maximum [Member] | Stock Options [Member] | Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Line Items] | ||||||
Total intrinsic value of stock options exercised | $ 1 | $ 1 | $ 2 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Assumptions Used to Estimate Value of Each Option Award) (Details) - Stock Options [Member] | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Assumptions used to estimate value of each option award | |||
Expected volatility (as a percent) | 54.90% | 50.70% | 54.10% |
Expected dividend yield (as a percent) | 0% | 0% | 0% |
Expected life (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate (as a percent) | 3.71% | 2.38% | 1.09% |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Awards Granted) (Details) - Omnibus Incentive Plan [Member] - Stock Options [Member] - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Awards Granted | |||
Total outstanding at the beginning of the period (in shares) | 1,188,168 | ||
Granted (in shares) | 661,231 | 568,623 | 271,735 |
Exercised (in shares) | (159,498) | ||
Forfeited (in shares) | (244,390) | ||
Expired (in shares) | (118,173) | ||
Total outstanding at the end of the period (in shares) | 1,327,338 | 1,188,168 | |
Total exercisable at the end of the period (in shares) | 565,373 | ||
Weighted Avg. Exercise Price | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 34.63 | ||
Granted (in dollars per share) | 26.67 | $ 28.64 | $ 54.36 |
Exercised (in dollars per share) | 26.75 | ||
Forfeited (in dollars per share) | 30.78 | ||
Expired (in dollars per share) | 38.51 | ||
Total outstanding at the end of the period (in dollars per share) | 31.97 | $ 34.63 | |
Total exercisable at the end of the period (in dollars per share) | $ 36.26 | ||
Total outstanding, end of period | $ 7 | ||
Total exercisable, end of period | $ 1 | ||
Weighted Average Remaining Contractual Term (in years) | |||
Total outstanding at the end of the period | 7 years 9 months 14 days | 7 years 5 months 12 days | |
Total exercisable at the end of the period | 6 years 4 months 2 days |
Stock-Based Compensation (Sum_2
Stock-Based Compensation (Summary of RSU Activity Under Omnibus Plan) (Details) - Omnibus Incentive Plan [Member] - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RSUs | |||
Total outstanding at the beginning of the period (in shares) | 1,022,970 | ||
Granted (in shares) | 920,369 | 1,146,733 | 443,040 |
Vested (in shares) | (400,186) | ||
Forfeited (in shares) | (256,980) | ||
Total outstanding at the end of the period (in shares) | 1,286,173 | 1,022,970 | |
Weighted Average Grant Date Fair Value | |||
Total outstanding at the beginning of the period (in dollars per share) | $ 31.95 | ||
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | 26.60 | $ 28 | $ 53.36 |
Vested (in dollars per share) | 33.50 | ||
Forfeited (in dollars per share) | 29.84 | ||
Total outstanding at the end of the period (in dollars per share) | $ 28.06 | $ 31.95 |
Stock-Based Compensation (Sum_3
Stock-Based Compensation (Summary Of Performance Share Activity) (Details) - $ / shares | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Performance Options [Member] | ||||
Performance Shares | ||||
Total outstanding at the beginning of the period (in shares) | 272,503 | |||
Granted to executives (in shares) | 652,004 | 272,503 | 0 | |
Forfeited (in shares) | (157,363) | |||
Total outstanding at the end of the period (in shares) | 767,144 | 272,503 | 767,144 | |
Weighted Average Grant Date Fair Value | ||||
Total outstanding at the beginning of the period (in dollars per share) | $ 11.50 | |||
Granted to executives (in dollars per share) | 10.40 | $ 11.50 | ||
Forfeited (in dollars per share) | 11.07 | |||
Total outstanding at the end of the period (in dollars per share) | $ 10.65 | $ 11.50 | $ 10.65 | |
Performance Shares [Member] | ||||
Performance Shares | ||||
Total outstanding at the beginning of the period (in shares) | 230,178 | |||
Granted to executives (in shares) | 285,801 | 98,017 | ||
Vested (in shares) | 0 | |||
Forfeited (in shares) | (96,686) | |||
Total outstanding at the end of the period (in shares) | 133,492 | 230,178 | 133,492 | |
Weighted Average Grant Date Fair Value | ||||
Total outstanding at the beginning of the period (in dollars per share) | $ 31.84 | |||
Granted to executives (in dollars per share) | 28.03 | $ 54.81 | ||
Forfeited (in dollars per share) | 30.22 | |||
Total outstanding at the end of the period (in dollars per share) | $ 33.01 | $ 31.84 | $ 33.01 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Benefit Plans [Abstract] | |||
Discretionary contributions to qualified profit sharing and non qualified deferred compensation plan | $ 4 | $ 4 | $ 4 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 17, 2021 | Feb. 17, 2021 | Jun. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 250 | ||||
Available borrowing capacity | 248 | ||||
Loss on extinguishment of debt | $ (30) | $ (31) | |||
Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Amount Outstanding | $ 2 | ||||
Credit Facilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Cost of debt purchased | $ 100 | ||||
Loss on extinguishment of debt | $ 1 | ||||
Credit Facilities [Member] | Maximum [Member] | Alternative Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 1% | ||||
Credit Facilities [Member] | Maximum [Member] | SOFR [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 2% | ||||
Credit Facilities [Member] | Minimum [Member] | Alternative Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 0.50% | ||||
Credit Facilities [Member] | Minimum [Member] | SOFR [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 1.50% | ||||
Term Loan A Maturing In 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Facility maturity date | Jun. 17, 2026 | ||||
Term Loan B Maturing In 2028 [Member] | |||||
Debt Instrument [Line Items] | |||||
Facility maturity date | Jun. 17, 2028 | ||||
Term Loan B Maturing In 2028 [Member] | Alternative Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 1.25% | ||||
Term Loan B Maturing In 2028 [Member] | SOFR [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing margin (as a percent) | 2.25% | ||||
Prior Term Loan Facility Maturing In 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Cost of debt purchased | $ 534 | ||||
Revolving Credit Facility Maturing In 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Facility maturity date | Jun. 17, 2026 | ||||
2026 Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Cost of debt purchased | $ 350 | ||||
Redemption premium | 21 | ||||
Write-off of debt issuance costs | $ 9 | ||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 106.10% | ||||
Interest rate swap contracts | |||||
Debt Instrument [Line Items] | |||||
Notional amount | $ 350 | ||||
Weighted Average Fixed Rate (as a percent) | 3.028% | ||||
Derivative, Basis Spread on Variable Rate | 2.25% | ||||
Derivative, basis spread floor percent | 0% |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | |
Long-term debt [Line Items] | |||
Long-term debt | $ 593 | $ 609 | |
Less current portion | (17) | (17) | |
Total long-term debt | 577 | 592 | |
Unamortized original issue discount | 1 | ||
Term Loan A Maturing In 2026 [Member] | |||
Long-term debt [Line Items] | |||
Unamortized debt issuance costs | 1 | 2 | |
Term Loan A Maturing In 2026 [Member] | Loans Payable [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [1] | 226 | 239 |
Term Loan B Maturing In 2028 [Member] | |||
Long-term debt [Line Items] | |||
Unamortized debt issuance costs | 2 | 3 | |
Unamortized original issue discount | 1 | 1 | |
Term Loan B Maturing In 2028 [Member] | Loans Payable [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | [2] | 367 | 370 |
Revolving Credit Facility Maturing In 2026 [Member] | |||
Long-term debt [Line Items] | |||
Long-term debt | |||
[1] Term Loan A is presented net of unamortized debt issuance costs of $ 1 million and $ 2 million as of December 31, 2023 and 2022, respectively. Term Loan B is presented net of unamortized debt issuance costs of $ 2 million and $ 3 million as of December 31, 2023 and 2022, respectively, and unamortized discount of $ 1 million as of December 31, 2023 and 2022. |
Long-Term Debt (Scheduled Debt
Long-Term Debt (Scheduled Debt Payments) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Long-Term Debt [Abstract] | ||
2024 | $ 17 | |
2025 | 17 | |
2026 | 205 | |
2027 | 4 | |
2028 | 355 | |
Total future scheduled debt payments | 598 | |
Less unamortized debt issuance costs | (3) | |
Less unamortized discount | (1) | |
Long-term debt | $ 593 | $ 609 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Schedule of Supplemental Information Relating to the Accompanying Condensed Consolidated Statements of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for (received from): | |||
Interest expense | $ 38 | $ 29 | $ 46 |
Interest income | (16) | (3) | (1) |
Income tax payments, net of refunds | $ 72 | $ 26 | $ 40 |
Comprehensive Income (Loss) (Su
Comprehensive Income (Loss) (Summary of the Activity in AOCI, Net of the Related Tax Effects) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | $ 8 | |||
Other comprehensive income (loss) before reclassifications: | ||||
Total other comprehensive loss | (3) | $ 27 | $ 15 | |
Balance at end of period | 6 | 8 | ||
Unrealized Gain (Loss) On Derivatives [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | 8 | (18) | ||
Other comprehensive income (loss) before reclassifications: | ||||
Pre-tax amount | 4 | 29 | ||
Tax provision (benefit) | 1 | 7 | ||
After-tax amount | 3 | 23 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | [1] | (5) | 4 | |
Total other comprehensive loss | (3) | 27 | ||
Balance at end of period | $ 6 | $ 8 | $ (18) | |
[1] Amounts are net of income taxes. See the table below on reclassifications out of AOCI for additional information. |
Comprehensive Income (Loss) (Sc
Comprehensive Income (Loss) (Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | $ (40) | $ (31) | $ (39) | |
Provision for income taxes | (57) | (22) | (39) | |
Net Income | 171 | 71 | 128 | |
Unrealized Gain (Loss) On Derivatives [Member] | Amount Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | [1] | 7 | (5) | (10) |
Provision for income taxes | [2] | (2) | 1 | 2 |
Net Income | $ 5 | $ (4) | $ (8) | |
[1] Included in interest expense in the accompanying consolidated statements of operations and comprehensive income . Included in provision for income taxes in the accompanying consolidated statements of operations and comprehensive income. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Derivative Financial Instruments [Abstract] | |
Hedging loss in accumulated other comprehensive income expected to be recognized in earnings, net of tax | $ 4 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurements [Abstract] | ||
Total debt | $ 593,000,000 | $ 609,000,000 |
Fair value of total debt | 598,000,000 | $ 613,000,000 |
Transfers between levels during period | $ 0 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of the Carrying Amount and Estimated Fair Value of the Company's Financial Instruments that are Recorded at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 7 | |
Total financial liabilities | $ 10 | |
Carrying Value [Member] | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities | 6 | |
Carrying Value [Member] | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities | 4 | |
Carrying Value [Member] | Prepaid Expenses And Other Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Assets | 5 | |
Carrying Value [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Assets | 2 | |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 7 | |
Total financial liabilities | 10 | |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Accrued Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities | 6 | |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Long-Term Obligation [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities | $ 4 | |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Prepaid Expenses And Other Current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Assets | 5 | |
Estimated Fair Value [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Assets | $ 2 |
Capital Stock (Narrative) (Deta
Capital Stock (Narrative) (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Capital Stock [Abstract] | ||
Common stock registered for offering and sale | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 86,553,387 | 86,079,773 |
Shares of common stock outstanding | 78,378,511 | 81,517,243 |
Share Repurchase Program (Narra
Share Repurchase Program (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | 28 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Sep. 07, 2021 | |
Share Repurchase Program [Abstract] | ||||
Repurchase authorized amount | $ 400 | |||
Repurchase authorized period | 3 years | |||
Number of shares purchased | 3,604,625,000,000 | 1,917,350,000,000 | 8,082,819 | |
Cost of share purchased | $ 120 | $ 59 | $ 281 | |
Remaining available for future repurchases under program | $ 119 | $ 119 |
Share Repurchase Program (Purch
Share Repurchase Program (Purchase of Outstanding Shares) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 28 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | ||
Share Repurchase Program [Abstract] | ||||
Number of shares purchased | 3,604,625,000,000 | 1,917,350,000,000 | 8,082,819 | |
Average price paid per share | [1] | $ 33.29 | $ 30.51 | |
Cost of share purchased | $ 120 | $ 59 | $ 281 | |
Associated fees and taxes | $ 1 | $ 1 | ||
[1] The average price paid per share and the cost of shares purchased are calculated on a trade date basis and exclude associated commissions and taxes of $ 1 million and less than $ 1 million for the years ended December 31, 2023 and 2022, respectively. |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income | $ 171 | $ 71 | $ 128 | |
Weighted-average common shares outstanding | 80,500,000 | 81,800,000 | 85,100,000 | |
Weighted-average common shares outstanding - assuming dilution | 80,900,000 | 82,000,000 | 85,500,000 | |
Basic earnings per share (in dollars per share) | $ 2.13 | $ 0.87 | $ 1.51 | |
Diluted earnings per share (in dollars per share) | $ 2.12 | $ 0.87 | $ 1.50 | |
Restricted Stock Units [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Effect of dilutive securities | [1] | 300,000 | 100,000 | 200,000 |
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 507,005 | 769,704 | 204,339 | |
Stock Options [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Effect of dilutive securities | [2] | 200,000 | ||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 1,276,776 | 1,357,963 | 659,347 | |
Performance Options [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive securities excluded from computation of diluted earnings per share (in shares) | 646,230 | 159,769 | ||
[1] RSUs of 507,005 shares, 769,704 shares and 204,339 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. Stock options to purchase 1,276,776 shares, 1,357,963 shares and 659,347 shares for the years ended December 31, 2023, 2022 and 2021, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. Performance options to purchase 646,230 shares and 159,769 shares for the years ended December 31, 2023 and 2022, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive. There were no performance options for the year ended December 31, 2021. |
Schedule I Frontdoor, Inc Paren
Schedule I Frontdoor, Inc Parent Company Only (Condensed Statements of Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | $ 1,780 | $ 1,662 | $ 1,602 | ||
Interest expense | 40 | 31 | 39 | ||
Interest and net investment income | (16) | (4) | (1) | ||
Loss on extinguishment of debt | $ 30 | 31 | |||
Income before Income Taxes | 229 | 93 | 168 | ||
Provision for income taxes | 57 | 22 | 39 | ||
Net Income | 171 | 71 | 128 | ||
Unrealized (loss) gain on derivative instruments, net of income taxes | (3) | 27 | 15 | ||
Total Other Comprehensive (Loss) Income, Net of Income Taxes: | (3) | 27 | 15 | ||
Comprehensive Income | 169 | 98 | 143 | ||
Parent Company [Member] | |||||
Condensed Income Statements, Captions [Line Items] | |||||
Revenue | |||||
Interest expense | 40 | 31 | 39 | ||
Interest and net investment (income) loss | 4 | ||||
Loss on extinguishment of debt | $ 30 | 31 | |||
Income before Income Taxes | (35) | (31) | (70) | ||
Provision for income taxes | 2 | 1 | 1 | ||
Net Loss from Operations | (38) | (32) | (71) | ||
Equity in earnings of subsidiaries (net of tax) | 209 | 104 | 199 | ||
Net Income | 171 | 71 | 128 | ||
Unrealized (loss) gain on derivative instruments, net of income taxes | (3) | 27 | 15 | ||
Total Other Comprehensive (Loss) Income, Net of Income Taxes: | (3) | 27 | 15 | ||
Comprehensive Income | $ 169 | $ 98 | $ 143 |
Schedule I Frontdoor, Inc Par_2
Schedule I Frontdoor, Inc Parent Company Only (Condensed Balance Sheets) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 325 | $ 292 | ||
Prepaid expenses and other current assets | 32 | 33 | ||
Total Current Assets | 363 | 330 | ||
Other assets | 5 | 8 | ||
Total Assets | 1,089 | 1,082 | ||
Accounts payable | 76 | 80 | ||
Other accrued liabilities | 22 | 21 | ||
Current portion of long-term debt | 17 | 17 | ||
Total Current Liabilities | 331 | 364 | ||
Long-Term Debt | 577 | 592 | ||
Deferred tax liabilities, net | 25 | 39 | ||
Other long-term liabilities | 5 | 8 | ||
Total Other Long-Term Liabilities | 46 | 65 | ||
Stockholders' Equity | 136 | 61 | $ 2 | $ (61) |
Total Liabilities and Shareholders' Equity | 1,089 | 1,082 | ||
Parent Company [Member] | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 39 | 1 | $ 2 | $ 72 |
Prepaid expenses and other current assets | 5 | 6 | ||
Total Current Assets | 44 | 7 | ||
Investments in subsidiaries | 874 | 1,268 | ||
Other assets | 3 | 6 | ||
Total Assets | 921 | 1,281 | ||
Accounts payable | 8 | |||
Other accrued liabilities | 11 | 9 | ||
Current portion of long-term debt | 17 | 17 | ||
Total Current Liabilities | 28 | 34 | ||
Long-Term Debt | 577 | 592 | ||
Due to Subsidiaries | 178 | 592 | ||
Deferred tax liabilities, net | 2 | 2 | ||
Other long-term liabilities | 2 | |||
Total Other Long-Term Liabilities | 3 | 2 | ||
Stockholders' Equity | 136 | 61 | ||
Total Liabilities and Shareholders' Equity | $ 921 | $ 1,281 |
Schedule I Frontdoor, Inc Par_3
Schedule I Frontdoor, Inc Parent Company Only (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Cash and Cash Equivalents at Beginning of Period | $ 292 | ||
Net Cash (Used for) Provided from Operating Activities from Continuing Operations | 202 | $ 142 | $ 185 |
Net Cash Provided from (Used for) Investing Activities | (32) | (35) | (31) |
Borrowings of debt, net of discount | 638 | ||
Debt issuance costs paid | (8) | ||
Call premium paid on retired debt | (21) | ||
Repurchase of common stock | (121) | (59) | (103) |
Other financing activities | 1 | (2) | (1) |
Net Cash Used for Financing Activities | (137) | (77) | (489) |
Cash Increase (Decrease) During the Period | 34 | 29 | (335) |
Cash and Cash Equivalents at End of Period | 325 | 292 | |
Parent Company [Member] | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Cash and Cash Equivalents at Beginning of Period | 1 | 2 | 72 |
Net Cash (Used for) Provided from Operating Activities from Continuing Operations | (42) | (25) | (32) |
Borrowings of debt, net of discount | 638 | ||
Payments of debt | (17) | (17) | (994) |
Debt issuance costs paid | (8) | ||
Call premium paid on retired debt | (21) | ||
Net transfers to Parent Company | 216 | 102 | 450 |
Repurchase of common stock | (121) | (59) | (103) |
Other financing activities | 1 | (2) | (1) |
Net Cash Used for Financing Activities | 80 | 24 | (38) |
Cash Increase (Decrease) During the Period | 38 | (1) | (70) |
Cash and Cash Equivalents at End of Period | $ 39 | $ 1 | $ 2 |
Schedule I Frontdoor, Inc Par_4
Schedule I Frontdoor, Inc Parent Company Only (Notes to Parent Only) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | 28 Months Ended | |||||
Jun. 17, 2021 | Feb. 17, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | Sep. 07, 2021 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||
Loss on extinguishment of debt | $ (30) | $ (31) | |||||||
Repurchase authorized amount | $ 400 | ||||||||
Number of shares purchased | 3,604,625,000,000 | 1,917,350,000,000 | 8,082,819 | ||||||
Cost of share purchased | $ 120 | $ 59 | $ 281 | ||||||
Remaining available for future repurchases under program | $ 119 | 119 | |||||||
Repurchase authorized period | 3 years | ||||||||
Parent Company [Member] | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Threshold For Restricted Net Assets Of Subsidiaries | 25% | ||||||||
Loss on extinguishment of debt | $ (30) | $ (31) | |||||||
Settlement of amounts due To subsidiaries | (605) | ||||||||
Dividend from subsidiaries | $ 605 | ||||||||
Repurchase authorized amount | $ 400 | ||||||||
Number of shares purchased | 8,082,819 | ||||||||
Cost of share purchased | $ 281 | ||||||||
Remaining available for future repurchases under program | $ 119 | $ 119 | |||||||
Repurchase authorized period | 3 years | ||||||||
Prior Term Loan Facility Maturing In 2025 [Member] | Parent Company [Member] | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Repayments of Term Loan Facility | $ 534 | $ 100 | |||||||
Loss on extinguishment of debt | $ (1) | ||||||||
2026 Notes [Member] | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 106.10% | ||||||||
Write-off of debt issuance costs | 9 | ||||||||
Redemption premium | 21 | 21 | |||||||
2026 Notes [Member] | Parent Company [Member] | |||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||
Repayments of Term Loan Facility | $ 350 | ||||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 106.10% | ||||||||
Write-off of debt issuance costs | 9 | ||||||||
Redemption premium | $ 21 | $ 21 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Allowance for doubtful accounts, Accounts receivable | ||||
Allowance for doubtful accounts | ||||
Balance at Beginning of Period | $ 4 | $ 4 | $ 2 | |
Additions Charged to Costs and Expenses | 22 | 19 | 18 | |
Deductions | [1] | 21 | 18 | 17 |
Balance at End of Period | 5 | 4 | 4 | |
Allowance for doubtful accounts ,Income tax valuation allowance | ||||
Allowance for doubtful accounts | ||||
Balance at Beginning of Period | 1 | 2 | ||
Additions Charged to Costs and Expenses | 1 | |||
Deductions | [1] | $ 1 | 1 | |
Balance at End of Period | $ 1 | $ 1 | ||
[1] Deductions to the allowance for doubtful accounts for accounts receivable reflect write-offs of uncollectible accounts. Deductions to the income tax valuation allowance are primarily attributable to the reduction in net operating loss carryforwards and other deferred tax assets related to the uncertainty of future taxable income in certain jurisdictions. |