Company: ALIT
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001809104-25-000062
Chunk: 167

Company: Alight, Inc. / Delaware
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 167
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 tax benefits realized by Alight may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Alight may make under the TRA will be substantial.The Company’s TRA liability established upon completion of the Business Combination is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The TRA liability balance at December 31, 2024 assumes: (i) a blended U.S. federal, state and local income tax rate of 26.3%; (ii) no material changes in tax law; (iii) the ability to utilize tax attributes based on current tax forecasts; and (iv) future payments under the TRA are made when due under the TRA. The amount of the expected future payments under the TRA has been discounted to its present value using a discount rate of 7.9%. Subsequent to the Business Combination, we record additional liabilities under the TRA as and when Class A units of Alight Holdings are exchanged for Class A Common Stock. Liabilities resulting from these exchanges will be recorded on a gross undiscounted basis and are not remeasured at fair value on a recurring basis. During the years ended December 31, 2024 and December 31, 2023, an additional TRA liability of $90 million and $109 million, respectively, was established as a result of these exchanges. As of December 31, 2024, $620 million of the TRA liability was measured at fair value on a recurring basis and $237 million was undiscounted and not remeasured at fair value. The following table summarizes the changes in the TRA liabilities (in millions):Tax Receivable Agreement Liability Beginning balance as of December 31, 2023$795 Fair value remeasurement34 Payments(62)Conversion of noncontrolling interest90 Ending balance as of December 31, 2024857 Less: current portion included in other current liabilities(100)Total long-term tax receivable agreement liability$757 

16. Fair Value MeasurementFair value is defined as the price that would be received