Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Travelport Worldwide LTD | |
Entity Central Index Key | 1,424,755 | |
Trading Symbol | tvpt | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 122,653,593 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net revenue | $ 560 | $ 529 | $ 1,686 | $ 1,652 |
Costs and expenses | ||||
Cost of revenue | 336 | 320 | 1,020 | 1,010 |
Selling, general and administrative | 114 | 130 | 340 | 315 |
Depreciation and amortization | 56 | 58 | 175 | 171 |
Total costs and expenses | 506 | 508 | 1,535 | 1,496 |
Operating income | 54 | 21 | 151 | 156 |
Interest expense, net | (40) | (67) | (118) | (237) |
Loss on early extinguishment of debt | (94) | (108) | ||
Gain on sale of shares of Orbitz Worldwide | 304 | 6 | 356 | |
Income before income taxes and share of (losses) earnings in equity method investments | 14 | 164 | 39 | 167 |
Provision for income taxes | (8) | (11) | (24) | (33) |
Share of (losses) earnings in equity method investments | (1) | 2 | (1) | (1) |
Net income | 5 | 155 | 14 | 133 |
Net income attributable to non-controlling interest in subsidiaries | (1) | (1) | (3) | (4) |
Net income attributable to the Company | $ 4 | $ 154 | $ 11 | $ 129 |
Income per share - Basic: | ||||
Income per share (in dollars per share) | $ 0.03 | $ 1.75 | $ 0.09 | $ 1.75 |
Weighted average common shares outstanding - Basic (in shares) | 122,495,392 | 88,254,078 | 122,062,715 | 73,701,371 |
Income per share - Diluted: | ||||
Income per share (in dollars per share) | $ 0.03 | $ 1.71 | $ 0.09 | $ 1.70 |
Weighted average common shares outstanding - Diluted (in shares) | 122,724,141 | 90,464,651 | 122,563,359 | 76,073,381 |
Cash dividends declared per Common Share (in dollars per share) | $ 0.075 | $ 0.225 |
CONSOLIDATED CONDENSED STATEME3
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 5 | $ 155 | $ 14 | $ 133 |
Other comprehensive loss, net of tax: | ||||
Currency translation adjustment, net of tax | (3) | (7) | (9) | (5) |
Changes in gain on available-for-sale securities, net of tax | 6 | (6) | 6 | |
Changes in loss on cash flow hedges, net of tax | 4 | |||
Changes in loss on equity investment, net of tax | (3) | (7) | ||
Other comprehensive loss, net of tax | (3) | (4) | (15) | (2) |
Comprehensive income (loss) | 2 | 151 | (1) | 131 |
Comprehensive income attributable to non-controlling interest in subsidiaries | (1) | (1) | (3) | (4) |
Comprehensive income (loss) attributable to the Company | $ 1 | $ 150 | $ (4) | $ 127 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 101 | $ 139 |
Accounts receivable (net of allowances for doubtful accounts of $14 and $14) | 237 | 184 |
Deferred income taxes | 3 | 5 |
Other current assets | 116 | 84 |
Total current assets | 457 | 412 |
Property and equipment, net | 449 | 414 |
Goodwill | 1,055 | 997 |
Trademarks and tradenames | 314 | 314 |
Other intangible assets, net | 564 | 619 |
Cash held as collateral | 26 | |
Deferred income taxes | 9 | 9 |
Other non-current assets | 90 | 101 |
Total assets | 2,938 | 2,892 |
Current liabilities: | ||
Accounts payable | 64 | 73 |
Accrued expenses and other current liabilities | 463 | 426 |
Current portion of long-term debt | 67 | 56 |
Total current liabilities | 594 | 555 |
Long-term debt | 2,405 | 2,384 |
Deferred income taxes | 57 | 54 |
Other non-current liabilities | 241 | 237 |
Total liabilities | $ 3,297 | $ 3,230 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity (deficit): | ||
Preference shares ($0.0025 par value; 225,000,000 shares authorized; no shares issued and outstanding as of both September 30, 2015 and December 31, 2014) | ||
Common shares ($0.0025 par value; 560,000,000 shares authorized; 124,262,703 shares and 122,505,599 shares issued; 122,500,140 shares and 121,411,360 shares outstanding as of September 30, 2015 and December 31, 2014, respectively) | ||
Additional paid in capital | $ 2,724 | $ 2,715 |
Treasury shares, at cost (1,762,563 shares and 1,094,239 shares as of September 30, 2015 and December 31, 2014, respectively) | (28) | |
Accumulated deficit | (2,887) | (2,898) |
Accumulated other comprehensive loss | (189) | (174) |
Total shareholders' equity (deficit) | (380) | (357) |
Equity attributable to non-controlling interest in subsidiaries | 21 | 19 |
Total equity (deficit) | (359) | (338) |
Total liabilities and equity | $ 2,938 | $ 2,892 |
CONSOLIDATED CONDENSED BALANCE5
CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited) (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts receivable (in dollars) | $ 14 | $ 14 |
Preferred stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Preferred stock, share authorized | 225,000,000 | 225,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0025 | $ 0.0025 |
Common stock, shares authorized | 560,000,000 | 560,000,000 |
Common stock, shares issued | 124,262,703 | 122,505,599 |
Common stock, shares outstanding | 122,500,140 | 121,411,360 |
Treasury stock, shares | 1,762,563 | 1,094,239 |
CONSOLIDATED CONDENSED STATEME6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net income | $ 14 | $ 133 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 175 | 171 |
Amortization of customer loyalty payments | 51 | 56 |
Gain on sale of shares of Orbitz Worldwide | (6) | (356) |
Amortization of debt finance costs | 5 | 8 |
Accrual of repayment fee and amortization of debt discount | 3 | 7 |
Loss on early extinguishment of debt | 108 | |
(Gain) loss on foreign exchange derivative instruments | (7) | 10 |
Payment-in-kind interest | 17 | |
Share of losses in equity method investments | 1 | 1 |
Equity-based compensation | 25 | 30 |
Deferred income taxes | 4 | 9 |
Customer loyalty payments | (56) | (66) |
Pension liability contribution | (2) | (5) |
Changes in assets and liabilities: | ||
Accounts receivable | (49) | (51) |
Other current assets | (39) | (1) |
Accounts payable, accrued expenses and other current liabilities | 32 | (88) |
Other | 3 | 6 |
Net cash provided by (used in) operating activities | 154 | (11) |
Investing activities | ||
Property and equipment additions | (76) | (83) |
Proceeds from sale of shares of Orbitz Worldwide | 6 | 366 |
Business acquired, net of cash | (61) | (10) |
Purchase of equity method investment | (10) | |
Net cash (used in) provided by investing activities | (131) | 263 |
Financing activities | ||
Proceeds from issuance of common shares in initial public offering | 445 | |
Proceeds from term loans | 2,345 | |
Proceeds from bridge loans | 425 | |
Repayment of term loans under senior secured credit agreement | (18) | (1,477) |
Repayment of bridge loans | (425) | |
Repayment of term loans under second lien credit agreement | (863) | |
Repurchase / repayment of senior notes and senior subordinated notes | (588) | |
Proceeds from revolver borrowings | 30 | 75 |
Repayment of revolver borrowings | (30) | (75) |
Repayment of capital lease obligations and other indebtedness | (26) | (23) |
Release of cash provided as collateral | 26 | 29 |
Payment related to early extinguishment of debt | (46) | |
Purchase of non-controlling interest in subsidiary | (65) | |
Debt finance costs | (37) | |
Dividend to shareholders | (28) | (2) |
Tax withholding for equity awards (Note 1) | (1) | (5) |
Treasury share purchase related to vesting of equity awards (Note 1) | (13) | |
Proceeds from settlement of derivative instruments | 3 | |
Other | 4 | |
Net cash used in financing activities | (60) | (280) |
Effect of changes in exchange rate on cash and cash equivalents | (1) | (1) |
Net decrease in cash and cash equivalents | (38) | (29) |
Cash and cash equivalents at beginning of period | 139 | 154 |
Cash and cash equivalents at end of period | 101 | 125 |
Supplementary disclosures of cash flow information | ||
Interest payments | 109 | 263 |
Income tax payments, net | 18 | 19 |
Non-cash exchange of debt for equity | 571 | |
Non-cash capital leases additions (Note 4) | 86 | $ 14 |
Non-cash purchase of property and equipment | $ 34 |
CONSOLIDATED CONDENSED STATEME7
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN TOTAL EQUITY (DEFICIT) (unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Millions | Common Stock | Additional Paid in Capital | Treasury Shares | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- Controlling Interest in Subsidiaries | Total |
Balance at Dec. 31, 2014 | $ 2,715 | $ (2,898) | $ (174) | $ 19 | $ (338) | ||
Balance (in shares) at Dec. 31, 2014 | 122,505,599 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Change in accounting policy for treasury shares (Note 1) | 17 | $ (17) | |||||
Change in accounting policy for treasury shares (Note 1) (in shares) | 1,094,239 | ||||||
Dividend to shareholders | (28) | (1) | (29) | ||||
Equity-based compensation | 20 | 20 | |||||
Equity-based compensation (in shares) | 1,757,104 | ||||||
Treasury shares activity related to vesting of equity awards | $ (11) | (11) | |||||
Treasury shares activity related to vesting of equity awards (in shares) | 668,324 | ||||||
Comprehensive income (loss), net of tax | 11 | (15) | 3 | (1) | |||
Balance at Sep. 30, 2015 | $ 2,724 | $ (28) | $ (2,887) | $ (189) | $ 21 | $ (359) | |
Balance (in shares) at Sep. 30, 2015 | 124,262,703 | 1,762,563 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation Basis of Presentation Travelport Worldwide Limited (the “Company” or “Travelport”) is a travel commerce platform providing distribution, technology, payment and other solutions for the global travel and tourism industry. With a presence in approximately 170 countries, the Travelport business is comprised of: The Travel Commerce Platform, through which the Company facilitates travel commerce by connecting the world’s leading travel providers, such as airlines and hotel chains, with online and offline travel buyers in the Company’s proprietary business to business (“B2B”) travel commerce platform. As travel industry needs evolve, Travelport is utilizing its Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending its reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators. In addition, Travelport has leveraged its domain expertise in the travel industry to design a pioneering B2B payment solution that addresses the needs of travel agencies to efficiently and securely make payments to travel providers globally. The Company also provides travel companies with a mobile travel platform and digital product set that allows airlines, hotels, corporate travel management companies and travel agencies to engage with their customers through mobile services including apps, mobile web and mobile messaging. Travelport utilizes the extensive data managed by its platform to provide an array of additional services, such as advertising solutions, subscription services, business intelligence data services, and marketing-oriented analytical tools to travel agencies, travel providers and other travel data users. Through its Technology Services, Travelport provides critical hosting solutions to airlines, such as pricing, shopping, ticketing, ground handling and other solutions, enabling them to focus on their core business competencies and reduce costs. The Company hosts reservations, inventory management and other related critical systems for Delta Air Lines Inc. These financial statements and other financial information included in this Quarterly Report on Form 10-Q are unaudited, with the exception of the December 31, 2014 balance sheet which was derived from audited financial statements. These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In presenting the consolidated condensed financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgments and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the consolidated condensed financial statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2014 Annual Report on Form 10-K filed with the SEC on February 27, 2015. Accounting for Treasury Shares The Company believes that its new accounting method is preferable as it more closely depicts the underlying intent of the shares withheld. In addition, the Company believes that the new presentation in shareholders’ equity provides greater visibility of treasury share activity. The Company’s new method of accounting will present treasury shares as a separate component of shareholders’ equity. This change is limited to reclassifications within shareholders’ equity and has no effect on operating income, net income, total assets or cash flows. The adoption of this new accounting policy did not have any material impact on the financial statements for prior periods. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | 2. Recently Issued Accounting Pronouncements Business Combination In September 2015, the Financial Accounting Standards Board (the “FASB”) issued guidance on accounting for measurement-period adjustments following a business combination. Under previous guidance, when an acquirer identified an adjustment to provisional amounts during the measurement period, the acquirer was required to revise comparative information for prior periods, including making any change in depreciation, amortization, or other income effects recognized in completing the initial accounting, as if the accounting for the business combination had been completed as of the acquisition date. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, rather than retrospectively. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, and must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been previously issued. The Company does not anticipate any significant impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Revenue Recognition In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In August 2015, the FASB decided to delay the effective date of the new revenue guidance issued in May 2014 by one year but allowed companies a choice to adopt the guidance as of the original effective date that was set out in May 2014. The Company has decided to defer the application date and, consequently, the May 2014 revenue recognition guidance will be applicable to the Company for interim and annual reporting periods beginning after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated condensed financial statements. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued new guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The guidance does not affect the recognition and measurement of debt issuance costs which would continue to be calculated using the interest method and be reported as interest expense. Additionally, the other areas of U.S. GAAP that prescribe the accounting treatment for third-party debt issuance costs will not be affected. In August 2015, the FASB issued further guidance to clarify SEC staff position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements whereby such costs could be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. These guidance are applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis when applicable. The Company had unamortized debt issuance costs in relation to its term loans of $25 million and $28 million as of September 30, 2015 and December 31, 2014, respectively. These costs will be reclassified from other non-current assets to long-term debt upon adoption of the guidance. Consolidation—Amendments to the Consolidation Analysis In February 2015, the FASB issued an update to the consolidation analysis under U.S. GAAP. This update changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted and may be applied retrospectively. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Income Statement—Extraordinary and Unusual Items In January 2015, the FASB issued an update as an initiative to reduce complexity in accounting standards by eliminating the concept of extraordinary items from U.S. GAAP. This update eliminates the requirements to consider whether an underlying event or transaction is extraordinary. However, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently are retained and are expanded to include items that are both unusual in nature and infrequently occurring. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted and may be applied retrospectively or prospectively. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Going Concern In August 2014, the FASB issued guidance on disclosures of uncertainties about an entity’s ability to continue as a going concern. The guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt about the Company’s ability to continue as a going concern within one year from the financial statements issuance date. The guidance is applicable to the Company for the annual period ending December 31, 2016 and all annual and interim periods thereafter. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Compensation—Stock Compensation In June 2014, the FASB issued guidance on accounting for stock compensation where share-based payment awards granted to employees require specific performance targets to be achieved in order for employees to become eligible to vest in the awards and such performance targets could be achieved after an employee completes the requisite service period. The amendment in this update requires a performance target that affects vesting and that could be achieved after the requisite service period to be treated as a performance condition. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, although earlier adoption is permitted. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Discontinued Operations In April 2014, the FASB issued guidance on discontinued operations that increased the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted the provisions of this guidance effective January 1, 2015, as required. There was no impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Accounting for Cumulative Translation Adjustment In March 2013, the FASB issued guidance on a parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity. The guidance provides the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. The Company adopted the provisions of this guidance effective January 1, 2015, as required. There was no impact on the consolidated condensed financial statements resulting from the adoption of this guidance. |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 3. Other Current Assets Other current assets consisted of: (in $ millions) September 30, 2015 December 31, 2014 Prepaid incentives $ 30 $ 13 Prepaid expenses 29 20 Sales and use tax receivables 27 28 Restricted cash 14 9 Derivative assets 1 — Available-for-sale securities — 6 Other 15 8 $ 116 $ 84 Restricted cash represents cash held on behalf of clients for a short period of time before being transferred to travel industry partners. A compensating balance is held in accrued expenses and other current liabilities as customer prepayments. In February 2015, the Company sold all of its available-for-sale securities, which represented shares of common stock of Orbitz Worldwide, Inc. (“Orbitz Worldwide”), realizing a gain of $6 million, all of which was included in and reclassified from accumulated other comprehensive loss. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 4. Property and Equipment, Net Property and equipment, net, consisted of: September 30, 2015 December 31, 2014 (in $ millions) Cost Accumulated depreciation Net Cost Accumulated depreciation Net Capitalized software $ 833 $ (604 ) $ 229 $ 772 $ (554 ) $ 218 Computer equipment 297 (156 ) 141 297 (175 ) 122 Building and leasehold improvements 23 (8 ) 15 24 (9 ) 15 Construction in progress 64 — 64 59 — 59 $ 1,217 $ (768 ) $ 449 $ 1,152 $ (738 ) $ 414 The Company recorded depreciation expense (including depreciation on assets under capital leases) of $38 million and $39 million during the three months ended September 30, 2015 and 2014, respectively. The Company recorded depreciation expense of $119 million and $113 million during the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015 and December 31, 2014, the Company had capital lease assets of $170 million and $152 million, respectively, with accumulated depreciation of $58 million and $63 million, respectively, included within computer equipment. During the nine months ended September 30, 2015, the Company terminated certain of its capital lease arrangements retiring $40 million of assets and simultaneously acquiring $86 million of similar assets under capital leases. During the same period, the Company also purchased $34 million of software in a non-cash transaction, partially financing it through a third-party. The amount of interest on capital projects capitalized was $1 million and $2 million for the three months ended September 30, 2015 and 2014, respectively. The amount of interest on capital projects capitalized was $2 million and $7 million for the nine months ended September 30, 2015 and 2014, respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets The changes in the carrying amount of goodwill and intangible assets for the Company between January 1, 2015 and September 30, 2015 are as follows: (in $ millions) January 1, 2015 Additions Retirements Foreign Exchange September 30, 2015 Non-Amortizable Assets: Goodwill $ 997 $ 58 $ — $ — $ 1,055 Trademarks and tradenames 314 — — — 314 Other Intangible Assets: Acquired intangible assets 1,129 — (3 ) 1 1,127 Accumulated amortization (687 ) (56 ) 3 (1 ) (741 ) Acquired intangible assets, net 442 (56 ) — — 386 Customer loyalty payments 334 58 (75 ) (6 ) 311 Accumulated amortization (157 ) (51 ) 75 — (133 ) Customer loyalty payments, net 177 7 — (6 ) 178 Other intangible assets, net $ 619 $ (49 ) $ — $ (6 ) $ 564 The changes in the carrying amount of goodwill and intangible assets for the Company between January 1, 2014 and September 30, 2014 are as follows: (in $ millions) January 1, 2014 Additions Retirements Foreign Exchange September 30, 2014 Non-Amortizable Assets: Goodwill $ 986 $ 14 $ — $ — $ 1,000 Trademarks and tradenames 314 — — — 314 Other Intangible Assets: Acquired intangible assets 1,129 — — — 1,129 Accumulated amortization (610 ) (58 ) — — (668 ) Acquired intangible assets, net 519 (58 ) — — 461 Customer loyalty payments 306 86 (52 ) (2 ) 338 Accumulated amortization (154 ) (56 ) 52 — (158 ) Customer loyalty payments, net 152 30 — (2 ) 180 Other intangible assets, net $ 671 $ (28 ) $ — $ (2 ) $ 641 On July 3, 2015, the Company completed the cash acquisition of Mobile Travel Technologies Ltd. (“MTT”), a private company based in Dublin, Ireland. MTT is a mobile travel platform and mobile technology provider for global airlines and travel companies. The purchase price was €55 million ($61 million), net of cash acquired. The preliminary fair values of the net tangible assets acquired and liabilities assumed in connection with the purchase of MTT have been recognized in the consolidated condensed balance sheet based upon their preliminary values at July 3, 2015. The excess of the purchase price over the preliminary fair values of the net tangible assets was recorded as goodwill. The preliminary fair values recorded were based upon a preliminary valuation and the estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The Company expects to continue to obtain information to assist it in determining the fair values of the net assets acquired at the acquisition date during the measurement period. The Company is in the process of allocating the purchase consideration to acquired identifiable assets and liabilities in respect of an acquisition made in December 2014 for total cash consideration of $5 million. The Company paid cash of $56 million and $66 million for customer loyalty payments during the nine months ended September 30, 2015 and 2014, respectively. Further, as of September 30, 2015 and December 31, 2014, the Company had balances payable of $59 million and $52 million, respectively, for customer loyalty payments (see Note 6—Accrued Expenses and Other Current Liabilities). Amortization expense for acquired intangible assets, which consists of customer relationships, was $18 million and $19 million for the three months ended September 30, 2015 and 2014, respectively, and $56 million and $58 million for the nine months ended September 30, 2015 and 2014, respectively, and is included as a component of depreciation and amortization on the Company’s consolidated condensed statements of operations. Amortization expense for customer loyalty payments was $15 million and $19 million for the three months ended September 30, 2015 and 2014, respectively, and $51 million and $56 million for the nine months ended September 30, 2015 and 2014, respectively, and is included within cost of revenue or revenue in the Company’s consolidated condensed statements of operations. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of: (in $ millions) September 30, 2015 December 31, 2014 Accrued commissions and incentives $ 280 $ 260 Accrued payroll and related 68 59 Deferred revenue 36 27 Accrued interest expense 18 18 Customer prepayments 14 9 Income tax payable 17 16 Derivative contracts 9 16 Pension and post-retirement benefit liabilities 1 2 Other 20 19 $ 463 $ 426 Included in accrued commissions and incentives are $59 million and $52 million of accrued customer loyalty payments as of September 30, 2015 and December 31, 2014, respectively. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 7. Long-Term Debt Long-term debt consisted of: (in $ millions) Interest rate Maturity September 30, 2015 December 31, 2014 Senior Secured Credit Agreement Term loans Dollar denominated (1) L+4.75% September 2021 $ 2,332 $ 2,347 Revolver borrowings Dollar denominated L+5.00% September 2019 — — Capital leases and other indebtedness 140 93 Total debt 2,472 2,440 Less: current portion 67 56 Long-term debt $ 2,405 $ 2,384 (1) Minimum LIBOR floor of 1.00% During the nine months ended September 30, 2015, the Company (i) repaid $18 million of its quarterly installments of term loans as required under the senior secured credit agreement, (ii) amortized $5 million of debt finance costs and $3 million of debt discount, (iii) repaid $25 million and terminated $40 million of its capital leases and entered into $86 million of new capital leases for information technology assets and (iv) incurred $27 million of other indebtedness of which $1 million was repaid. In March 2015, the Company’s credit rating improved and, under the terms of the senior secured credit agreement, the applicable rate in respect of its term loans was reduced by 0.25%, with immediate effect. The interest rate applicable to the term loans is currently based on, at the Company’s election, (i) LIBOR plus 4.75% or (ii) base rate (as defined in the agreement) plus 3.75%. The term loans are subject to a LIBOR floor of 1.00% and a base rate floor of 2.00%. The Company expects to pay interest based on LIBOR plus 4.75% for the term loans. Under the senior secured credit agreement, the Company has a $125 million revolving credit facility with a consortium of banks, which contains a letter of credit sub-limit up to a maximum of $50 million. During the three months ended September 30, 2015, the Company borrowed and repaid $30 million under this facility. As of September 30, 2015, the Company had no outstanding borrowings under its revolving credit facility and utilized $24 million for the issuance of letters of credit, with a balance of $101 million remaining. The senior secured credit agreement also permits the issuance of certain cash collateralized letters of credit in addition to those that can be issued under the revolving credit facility, whereby 103% of cash collateral is to be maintained for outstanding letters of credit. In July 2015, all cash collateralized letters of credit were terminated and the Company received the outstanding balance of cash provided as collateral. As of September 30, 2015, there were no outstanding cash collateralized letters of credit. As of September 30, 2015, the Company was in compliance with all debt covenants under the senior secured credit agreement. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | 8. Financial Instruments The Company uses derivative financial instruments as part of its overall strategy to manage its exposure to market risks primarily associated with fluctuations in foreign currency exchange rates. The Company does not use derivatives for trading or speculative purposes. During the nine months ended September 30, 2015, there was no material change in the Company’s foreign currency risk management policies or in its fair value methodology. As of September 30, 2015, the Company had a net liability position of $9 million related to derivative financial instruments associated with its foreign currency denominated receivables and payables, and forecasted earnings of its foreign subsidiaries. The primary interest rate risk exposure as of September 30, 2015 was the impact of LIBOR interest rates on the Company’s dollar denominated variable rate term loan borrowings. The term loans have a 1.00% LIBOR floor. During the nine months ended September 30, 2015, LIBOR rates were below 1.00%. Presented below is a summary of the fair value of the Company’s derivative contracts, which have not been designated as hedging instruments, recorded on the consolidated condensed balance sheets at fair value. Fair Value Asset Fair Value (Liability) (in $ millions) Balance Sheet Location September 30, 2015 December 31, 2014 Balance Sheet Location September 30, 2015 December 31, 2014 Foreign currency forward contracts Other current $ 1 — Accrued expenses $ (9 ) $ (16 ) Foreign currency forward contracts — — Other non-current (1 ) — $ 1 $ — $ (10 ) $ (16 ) As of September 30, 2015, the notional amounts of foreign currency forward contracts were $275 million. These derivative contracts cover transactions for a period that does not exceed two years. The following table provides a reconciliation of the movement in the net carrying amount of derivative financial instruments, during the nine months ended September 30, 2015. (in $ millions) Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014 Net derivative (liability) asset opening balance $ (16 ) $ 10 Total loss for the period included in net income (15 ) (9 ) Total loss for the period accounted through other comprehensive loss — (4 ) Payments on (proceeds from) settlement of foreign currency derivative contracts 22 (6 ) Net derivative liability closing balance $ (9 ) $ (9 ) The significant unobservable inputs used to fair value the Company’s derivative financial instruments are probability of default of approximately 6% and a recovery rate of 20% which are applied to the Company’s credit default swap adjustments. As the credit valuation adjustment applied to arrive at the fair value of derivatives is less than 15% of the unadjusted fair value of derivative instruments for two consecutive quarters, the Company has categorized derivative fair valuations at Level 2 of the fair value hierarchy. A 10% change in the significant unobservable inputs will not have a material impact on the fair value of the derivative financial instruments as of September 30, 2015. The table below presents the impact of changes in fair values of derivatives designated as hedges on other comprehensive loss and the impact derivatives not designated as hedges had on net income during the three and nine months ended September 30, 2015: Amount of Gain Recognized in Other Comprehensive Loss Statement of Operations Location Amount of Loss Recorded in Net Income Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30, (in $ millions) 2015 2014 2015 2014 2015 2014 2015 2014 Derivatives designated as hedging instruments: Interest rate caps $ — $ — $ — $ 4 Interest expense, net $ — $ — $ — $ — Derivatives not designated as hedging instruments: Interest rate caps N/A N/A N/A N/A Interest expense, net — (1 ) — (9 ) Foreign currency forward contracts N/A N/A N/A N/A Selling, general and administrative (10 ) (9 ) (15 ) (7 ) $ (10 ) $ (10 ) $ (15 ) $ (16 ) Fair Value Disclosures for All Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The fair values of the Company’s other financial instruments are as follows: September 30, 2015 December 31, 2014 (in $ millions) Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Asset (liability) Available-for-sale securities Level 1 $ — $ — $ 6 $ 6 Derivative assets Level 2 1 1 — — Derivative liabilities Level 2 (10 ) (10 ) (16 ) (16 ) Total debt Level 2 (2,472 ) (2,489 ) (2,440 ) (2,461 ) The fair value of the Company’s term loans has been determined based on quoted prices obtained from independent brokers for identical debt instruments when traded as an asset and is categorized within Level 2 of the fair value hierarchy. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Purchase Commitments In the ordinary course of business, the Company makes various commitments to purchase goods and services from specific suppliers, including those related to capital expenditures. As of September 30, 2015, the Company had approximately $76 million of outstanding purchase commitments, primarily relating to service contracts for information technology, of which $48 million relates to the twelve months ending September 30, 2016. These purchase obligations extend through 2019. Contingencies Company Litigation The Company is involved in various claims, legal proceedings and governmental inquiries related to contract disputes, business practices, intellectual property and other commercial, employment and tax matters. The Company believes it has adequately accrued for such matters as appropriate or, for matters not requiring accrual, believes they will not have a material adverse effect on its results of operations, financial position or cash flows based on information currently available. However, litigation is inherently unpredictable and although the Company believes its accruals are adequate and/or that it has valid defenses in these matters, unfavorable resolutions could occur, which could have a material effect on the Company’s results of operations or cash flows in a particular reporting period. Standard Guarantees/Indemnification In the ordinary course of business, the Company enters into numerous agreements that contain standard guarantees and indemnities whereby the Company indemnifies another party for breaches of representations and warranties. In addition, many of these parties are also indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. Such guarantees or indemnifications are granted under various agreements, including those governing (i) purchases, sales or outsourcing of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) use of derivatives, and (v) issuances of debt. The guarantees or indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) licensees of the Company’s trademarks, (iv) financial institutions in derivative contracts, and (v) underwriters or lenders in debt issuances. While some of these guarantees extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments the Company could be required to make under these guarantees, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these guarantees, as the triggering events are not subject to predictability and there is little or no history of claims against the Company under such arrangements. With respect to certain of the aforementioned guarantees, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates any potential payments to be made. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Equity | 10. Equity Dividends on Common Shares The Company’s Board of Directors declared the following cash dividends during the three and nine months ended September 30, 2015: Declaration Date Dividend Per Share Record Date Payment Date Amount (in $ million) February 19, 2015 $ 0.075 March 5, 2015 March 19, 2015 9 May 1, 2015 $ 0.075 June 5, 2015 June 18, 2015 10 July 31, 2015 $ 0.075 September 3, 2015 September 17, 2015 9 On October 28, 2015, the Company’s Board of Directors declared a cash dividend of $0.075 per common share (see Note 13—Subsequent Events). |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | 11. Equity-Based Compensation In connection with the acquisition of MTT on July 3, 2015, the Company granted equity awards to MTT executives to be delivered at a future date in the Company’s common shares, based on performance targets and other terms and conditions set forth in the awards. The table below presents the activity of the Company’s restricted share units (“RSUs”) and stock options for the nine months ended September 30, 2015: Restricted Share Units (in dollars, except number of RSUs) Number Weighted Average Grant Date Fair Value Balance as of January 1, 2015 3,196,422 $ 18.68 Granted at fair market value 133,501 $ 14.89 Vested (1) (1,800,857 ) $ 19.81 Forfeited (9,000 ) $ 16.00 Balance as of September 30, 2015 1,520,066 $ 16.91 (1) Primarily relates to the vesting of substantially all of the outstanding performance-based restricted share units (“PRSUs”) under the 2013 equity-based long-term incentive program upon satisfaction of the performance criteria in April 2015. Stock Options (in dollars, except number of stock options) Number Weighted Average Grant Date Fair Value Balance as of January 1, 2015 1,270,871 $ 6.72 Granted at fair market value 121,117 $ 5.37 Forfeited — — Balance as of September 30, 2015 1,391,988 $ 6.61 Of the above outstanding 1,391,988 stock options, 160,000 options have vested and are exercisable as of September 30, 2015. The weighted-average exercise price of options granted during the nine months ended September 30, 2015 was $14.47 per option, with the remaining weighted average contractual term as of September 30, 2015 of 9.65 years. Compensation expense for the nine months ended September 30, 2015 and 2014 resulted in a credit to equity on the Company’s consolidated condensed balance sheets of $20 million and $30 million, respectively. The Company expects the future equity-based compensation expense in relation to awards recognized for accounting purposes as being granted as of September 30, 2015 will be approximately $33 million based on the fair value of the equity awards on the grant date. |
Income Per Share
Income Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Share | 12. Income Per Share The following table reconciles the numerators and denominators used in the computation of basic and diluted income per share: Three Months Ended September 30, Nine Months Ended September 30, (in $ million, except share data) 2015 2014 2015 2014 Numerator – Basic and Diluted EPS: Net income attributable to the Company $ 4 $ 154 $ 11 $ 129 Denominator – Basic EPS: Weighted average common shares outstanding 122,495,392 88,254,078 122,062,715 73,701,371 Income per share – Basic $ 0.03 $ 1.75 $ 0.09 $ 1.75 Denominator – Diluted EPS: Number of shares used for Basic EPS 122,495,392 88,254,078 122,062,715 73,701,371 Weighted average effect of dilutive securities RSUs 161,744 2,119,936 447,081 2,327,658 Stock Options 67,005 90,637 53,563 44,352 Weighted average common shares outstanding – Diluted 122,724,141 90,464,651 122,563,359 76,073,381 Income per share – Diluted $ 0.03 $ 1.71 $ 0.09 $ 1.70 Basic income per share is based on the weighted average number of common shares outstanding during each period. Diluted income per share is based on the weighted average number of common shares outstanding and the effect of all dilutive common share equivalents during each period. For each of the three and nine months ended September 30, 2015, the Company had 1.1 million of weighted-average common share equivalents, primarily associated with the Company’s stock options that were excluded from the calculation of diluted income per share as their inclusion would have been antidilutive as the common shares repurchased from the total assumed proceeds applying the treasury stock method exceed the common shares that would have been issued. The increase in the weighted average number of common shares outstanding for the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014 is a result of several debt-for-equity exchanges and the initial public offering of the Company’s common shares during 2014. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On October 8, 2015, the Company increased its shareholding in Locomote Holdings Pty Ltd from 49% to a majority ownership stake of 55% and Locomote’s results will be consolidated with the Company from this date. The Company is in the process of allocating the purchase consideration to acquired identifiable assets and liabilities in respect of this step-up acquisition. On October 28, 2015, the Company’s Board of Directors declared a cash dividend of $0.075 per common share for the third quarter of 2015, which is payable on December 17, 2015 to shareholders of record on December 4, 2015. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Travelport Worldwide Limited (the “Company” or “Travelport”) is a travel commerce platform providing distribution, technology, payment and other solutions for the global travel and tourism industry. With a presence in approximately 170 countries, the Travelport business is comprised of: The Travel Commerce Platform, through which the Company facilitates travel commerce by connecting the world’s leading travel providers, such as airlines and hotel chains, with online and offline travel buyers in the Company’s proprietary business to business (“B2B”) travel commerce platform. As travel industry needs evolve, Travelport is utilizing its Travel Commerce Platform to redefine the electronic distribution and merchandising of airline core and ancillary products, as well as extending its reach into the growing world of travel commerce beyond air, including to hotel, car rental, rail, cruise-line and tour operators. In addition, Travelport has leveraged its domain expertise in the travel industry to design a pioneering B2B payment solution that addresses the needs of travel agencies to efficiently and securely make payments to travel providers globally. The Company also provides travel companies with a mobile travel platform and digital product set that allows airlines, hotels, corporate travel management companies and travel agencies to engage with their customers through mobile services including apps, mobile web and mobile messaging. Travelport utilizes the extensive data managed by its platform to provide an array of additional services, such as advertising solutions, subscription services, business intelligence data services, and marketing-oriented analytical tools to travel agencies, travel providers and other travel data users. Through its Technology Services, Travelport provides critical hosting solutions to airlines, such as pricing, shopping, ticketing, ground handling and other solutions, enabling them to focus on their core business competencies and reduce costs. The Company hosts reservations, inventory management and other related critical systems for Delta Air Lines Inc. These financial statements and other financial information included in this Quarterly Report on Form 10-Q are unaudited, with the exception of the December 31, 2014 balance sheet which was derived from audited financial statements. These consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. In presenting the consolidated condensed financial statements in accordance with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgments and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the consolidated condensed financial statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the Company’s 2014 Annual Report on Form 10-K filed with the SEC on February 27, 2015. Accounting for Treasury Shares The Company believes that its new accounting method is preferable as it more closely depicts the underlying intent of the shares withheld. In addition, the Company believes that the new presentation in shareholders’ equity provides greater visibility of treasury share activity. The Company’s new method of accounting will present treasury shares as a separate component of shareholders’ equity. This change is limited to reclassifications within shareholders’ equity and has no effect on operating income, net income, total assets or cash flows. The adoption of this new accounting policy did not have any material impact on the financial statements for prior periods. |
Recently Issued Accounting Pronouncements | Business Combination In September 2015, the Financial Accounting Standards Board (the “FASB”) issued guidance on accounting for measurement-period adjustments following a business combination. Under previous guidance, when an acquirer identified an adjustment to provisional amounts during the measurement period, the acquirer was required to revise comparative information for prior periods, including making any change in depreciation, amortization, or other income effects recognized in completing the initial accounting, as if the accounting for the business combination had been completed as of the acquisition date. Under the new guidance, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, rather than retrospectively. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, and must be applied prospectively to adjustments to provisional amounts that occur after the effective date. Early adoption is permitted for financial statements that have not been previously issued. The Company does not anticipate any significant impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Revenue Recognition In May 2014, the FASB issued guidance on revenue from contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In August 2015, the FASB decided to delay the effective date of the new revenue guidance issued in May 2014 by one year but allowed companies a choice to adopt the guidance as of the original effective date that was set out in May 2014. The Company has decided to defer the application date and, consequently, the May 2014 revenue recognition guidance will be applicable to the Company for interim and annual reporting periods beginning after December 15, 2017. The guidance permits the use of either a retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated condensed financial statements. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued new guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The guidance does not affect the recognition and measurement of debt issuance costs which would continue to be calculated using the interest method and be reported as interest expense. Additionally, the other areas of U.S. GAAP that prescribe the accounting treatment for third-party debt issuance costs will not be affected. In August 2015, the FASB issued further guidance to clarify SEC staff position on presenting and measuring debt issuance costs incurred in connection with line-of-credit arrangements whereby such costs could be presented as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement. These guidance are applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis when applicable. The Company had unamortized debt issuance costs in relation to its term loans of $25 million and $28 million as of September 30, 2015 and December 31, 2014, respectively. These costs will be reclassified from other non-current assets to long-term debt upon adoption of the guidance. Consolidation—Amendments to the Consolidation Analysis In February 2015, the FASB issued an update to the consolidation analysis under U.S. GAAP. This update changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted and may be applied retrospectively. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Income Statement—Extraordinary and Unusual Items In January 2015, the FASB issued an update as an initiative to reduce complexity in accounting standards by eliminating the concept of extraordinary items from U.S. GAAP. This update eliminates the requirements to consider whether an underlying event or transaction is extraordinary. However, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently are retained and are expanded to include items that are both unusual in nature and infrequently occurring. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted and may be applied retrospectively or prospectively. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Going Concern In August 2014, the FASB issued guidance on disclosures of uncertainties about an entity’s ability to continue as a going concern. The guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt about the Company’s ability to continue as a going concern within one year from the financial statements issuance date. The guidance is applicable to the Company for the annual period ending December 31, 2016 and all annual and interim periods thereafter. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Compensation—Stock Compensation In June 2014, the FASB issued guidance on accounting for stock compensation where share-based payment awards granted to employees require specific performance targets to be achieved in order for employees to become eligible to vest in the awards and such performance targets could be achieved after an employee completes the requisite service period. The amendment in this update requires a performance target that affects vesting and that could be achieved after the requisite service period to be treated as a performance condition. The guidance is applicable to the Company for interim and annual reporting periods beginning after December 15, 2015, although earlier adoption is permitted. The Company does not anticipate an impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Discontinued Operations In April 2014, the FASB issued guidance on discontinued operations that increased the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The Company adopted the provisions of this guidance effective January 1, 2015, as required. There was no impact on the consolidated condensed financial statements resulting from the adoption of this guidance. Accounting for Cumulative Translation Adjustment In March 2013, the FASB issued guidance on a parent company’s accounting for the cumulative translation adjustment upon derecognition of certain subsidiaries or groups of assets within a foreign entity. The guidance provides the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. The Company adopted the provisions of this guidance effective January 1, 2015, as required. There was no impact on the consolidated condensed financial statements resulting from the adoption of this guidance. |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of summary of other current assets | (in $ millions) September 30, 2015 December 31, 2014 Prepaid incentives $ 30 $ 13 Prepaid expenses 29 20 Sales and use tax receivables 27 28 Restricted cash 14 9 Derivative assets 1 — Available-for-sale securities — 6 Other 15 8 $ 116 $ 84 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of summary of property and equipment, net | September 30, 2015 December 31, 2014 (in $ millions) Cost Accumulated depreciation Net Cost Accumulated depreciation Net Capitalized software $ 833 $ (604 ) $ 229 $ 772 $ (554 ) $ 218 Computer equipment 297 (156 ) 141 297 (175 ) 122 Building and leasehold improvements 23 (8 ) 15 24 (9 ) 15 Construction in progress 64 — 64 59 — 59 $ 1,217 $ (768 ) $ 449 $ 1,152 $ (738 ) $ 414 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill and intangible assets | (in $ millions) January 1, 2015 Additions Retirements Foreign Exchange September 30, 2015 Non-Amortizable Assets: Goodwill $ 997 $ 58 $ — $ — $ 1,055 Trademarks and tradenames 314 — — — 314 Other Intangible Assets: Acquired intangible assets 1,129 — (3 ) 1 1,127 Accumulated amortization (687 ) (56 ) 3 (1 ) (741 ) Acquired intangible assets, net 442 (56 ) — — 386 Customer loyalty payments 334 58 (75 ) (6 ) 311 Accumulated amortization (157 ) (51 ) 75 — (133 ) Customer loyalty payments, net 177 7 — (6 ) 178 Other intangible assets, net $ 619 $ (49 ) $ — $ (6 ) $ 564 (in $ millions) January 1, 2014 Additions Retirements Foreign Exchange September 30, 2014 Non-Amortizable Assets: Goodwill $ 986 $ 14 $ — $ — $ 1,000 Trademarks and tradenames 314 — — — 314 Other Intangible Assets: Acquired intangible assets 1,129 — — — 1,129 Accumulated amortization (610 ) (58 ) — — (668 ) Acquired intangible assets, net 519 (58 ) — — 461 Customer loyalty payments 306 86 (52 ) (2 ) 338 Accumulated amortization (154 ) (56 ) 52 — (158 ) Customer loyalty payments, net 152 30 — (2 ) 180 Other intangible assets, net $ 671 $ (28 ) $ — $ (2 ) $ 641 |
Accrued Expenses and Other Cu25
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of summary of accrued expenses and other current liabilities | (in $ millions) September 30, 2015 December 31, 2014 Accrued commissions and incentives $ 280 $ 260 Accrued payroll and related 68 59 Deferred revenue 36 27 Accrued interest expense 18 18 Customer prepayments 14 9 Income tax payable 17 16 Derivative contracts 9 16 Pension and post-retirement benefit liabilities 1 2 Other 20 19 $ 463 $ 426 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of summary of long-term debt | (in $ millions) Interest rate Maturity September 30, 2015 December 31, 2014 Senior Secured Credit Agreement Term loans Dollar denominated (1) L+4.75% September 2021 $ 2,332 $ 2,347 Revolver borrowings Dollar denominated L+5.00% September 2019 — — Capital leases and other indebtedness 140 93 Total debt 2,472 2,440 Less: current portion 67 56 Long-term debt $ 2,405 $ 2,384 (1) Minimum LIBOR floor of 1.00% |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of summary of fair value of company's derivative contracts | Fair Value Asset Fair Value (Liability) (in $ millions) Balance Sheet Location September 30, 2015 December 31, 2014 Balance Sheet Location September 30, 2015 December 31, 2014 Foreign currency forward contracts Other current $ 1 — Accrued expenses $ (9 ) $ (16 ) Foreign currency forward contracts — — Other non-current (1 ) — $ 1 $ — $ (10 ) $ (16 ) |
Schedule of summary of reconciliation of net carrying amount of derivative financial instruments | (in $ millions) Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2014 Net derivative (liability) asset opening balance $ (16 ) $ 10 Total loss for the period included in net income (15 ) (9 ) Total loss for the period accounted through other comprehensive loss — (4 ) Payments on (proceeds from) settlement of foreign currency derivative contracts 22 (6 ) Net derivative liability closing balance $ (9 ) $ (9 ) |
Schedule of impact of changes in fair values of derivatives | Amount of Gain Statement of Operations Location Amount of Loss Three Months Nine Months Three Months Nine Months (in $ millions) 2015 2014 2015 2014 2015 2014 2015 2014 Derivatives designated as hedging Interest rate caps $ — $ — $ — $ 4 Interest expense, net $ — $ — $ — $ — Derivatives not designated as hedging instruments: Interest rate caps N/A N/A N/A N/A Interest expense, net — (1 ) — (9 ) Foreign currency forward contracts N/A N/A N/A N/A Selling, general and administrative (10 ) (9 ) (15 ) (7 ) $ (10 ) $ (10 ) $ (15 ) $ (16 ) |
Schedule of fair values of company's other financial instruments | September 30, 2015 December 31, 2014 (in $ millions) Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Asset (liability) Available-for-sale securities Level 1 $ — $ — $ 6 $ 6 Derivative assets Level 2 1 1 — — Derivative liabilities Level 2 (10 ) (10 ) (16 ) (16 ) Total debt Level 2 (2,472 ) (2,489 ) (2,440 ) (2,461 ) |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of cash dividend declared | Declaration Date Dividend Record Payment Amount February 19, 2015 $ 0.075 March 5, 2015 March 19, 2015 9 May 1, 2015 $ 0.075 June 5, 2015 June 18, 2015 10 July 31, 2015 $ 0.075 September 3, 2015 September 17, 2015 9 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Restricted Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of activity of restricted share units ("RSUs") and stock options | Restricted Share Units (in dollars, except number of RSUs) Number Weighted Fair Value Balance as of January 1, 2015 3,196,422 $ 18.68 Granted at fair market value 133,501 $ 14.89 Vested (1) (1,800,857 ) $ 19.81 Forfeited (9,000 ) $ 16.00 Balance as of September 30, 2015 1,520,066 $ 16.91 (1) Primarily relates to the vesting of substantially all of the outstanding performance-based restricted share units (“PRSUs”) under the 2013 equity-based long-term incentive program upon satisfaction of the performance criteria in April 2015. |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of activity of restricted share units ("RSUs") and stock options | Stock Options (in dollars, except number of stock options) Number Weighted Fair Value Balance as of January 1, 2015 1,270,871 $ 6.72 Granted at fair market value 121,117 $ 5.37 Forfeited — — Balance as of September 30, 2015 1,391,988 $ 6.61 |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted income per share | Three Months Ended Nine Months Ended (in $ million, except share data) 2015 2014 2015 2014 Numerator – Basic and Diluted EPS: Net income attributable to the Company $ 4 $ 154 $ 11 $ 129 Denominator – Basic EPS: Weighted average common shares outstanding 122,495,392 88,254,078 122,062,715 73,701,371 Income per share – Basic $ 0.03 $ 1.75 $ 0.09 $ 1.75 Denominator – Diluted EPS: Number of shares used for Basic EPS 122,495,392 88,254,078 122,062,715 73,701,371 Weighted average effect of dilutive securities RSUs 161,744 2,119,936 447,081 2,327,658 Stock Options 67,005 90,637 53,563 44,352 Weighted average common shares outstanding – Diluted 122,724,141 90,464,651 122,563,359 76,073,381 Income per share – Diluted $ 0.03 $ 1.71 $ 0.09 $ 1.70 |
Basis of Presentation (Detail T
Basis of Presentation (Detail Textuals) | Sep. 30, 2015Country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries in which company operates | 170 |
Recently Issued Accounting Pr32
Recently Issued Accounting Pronouncements (Detail Textuals) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Unamortized debt issuance cost | $ 25 | $ 28 |
Other Current Assets - Summary
Other Current Assets - Summary of Other Current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid incentives | $ 30 | $ 13 |
Prepaid expenses | 29 | 20 |
Sales and use tax receivables | 27 | 28 |
Restricted cash | 14 | 9 |
Derivative assets | 1 | |
Available-for-sale securities | 6 | |
Other | 15 | 8 |
Other current assets, Total | $ 116 | $ 84 |
Other Current Assets (Detail Te
Other Current Assets (Detail Textuals) $ in Millions | 1 Months Ended |
Feb. 28, 2015USD ($) | |
Orbitz Worldwide | |
Other Current Assets [Line Items] | |
Gain on sale of available-for-sale securities reclassified from accumulated other comprehensive loss | $ 6 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and equipment, Net (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 1,217 | $ 1,152 |
Accumulated depreciation | (768) | (738) |
Net | 449 | 414 |
Capitalized software | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 833 | 772 |
Accumulated depreciation | (604) | (554) |
Net | 229 | 218 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 297 | 297 |
Accumulated depreciation | (156) | (175) |
Net | 141 | 122 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 23 | 24 |
Accumulated depreciation | (8) | (9) |
Net | 15 | 15 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 64 | $ 59 |
Accumulated depreciation | ||
Net | $ 64 | $ 59 |
Property and Equipment, Net - (
Property and Equipment, Net - (Detail Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense (including depreciation on assets under capital leases) | $ 38 | $ 39 | $ 119 | $ 113 | |
Capital lease assets | 170 | 170 | $ 152 | ||
Capital lease assets, accumulated depreciation | 58 | 58 | $ 63 | ||
Capital lease assets retired on termination | 40 | ||||
Assets acquired under capital lease | 86 | ||||
Non-cash purchase of software | 34 | ||||
Interest on capital projects capitalized | $ 1 | $ 2 | 2 | $ 7 | |
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Non-cash purchase of software | $ 34 |
Intangible Assets - Changes in
Intangible Assets - Changes in the carrying amount of goodwill and intangible assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 997 | $ 986 |
Goodwill, Additions | $ 58 | $ 14 |
Goodwill, Retirements | ||
Goodwill, Foreign Exchange | ||
Goodwill, Ending Balance | $ 1,055 | $ 1,000 |
Indefinite-lived Intangible Assets [Roll Forward] | ||
Trademarks and tradenames, Beginning Balance | 314 | |
Trademarks and tradenames, Ending Balance | 314 | |
Other Intangible Assets: | ||
Other intangible assets, net, Beginning Balance | 619 | 671 |
Other intangible assets, net, Additions | $ (49) | $ (28) |
Other Intangible Assets, Retirements | ||
Other intangible assets, net, Foreign Exchange | $ (6) | $ (2) |
Other intangible assets, net, Ending Balance | 564 | 641 |
Trademarks and tradenames | ||
Indefinite-lived Intangible Assets [Roll Forward] | ||
Trademarks and tradenames, Beginning Balance | $ 314 | $ 314 |
Trademarks and tradenames, Additions | ||
Trademarks and tradenames, Retirements | ||
Trademarks and tradenames, Foreign Exchange | ||
Trademarks and tradenames, Ending Balance | $ 314 | $ 314 |
Customer relationships | ||
Other Intangible Assets: | ||
Total other intangible assets, Beginning Balance | $ 1,129 | $ 1,129 |
Total other intangible assets, Additions | ||
Total other intangible assets, Retirements | $ (3) | |
Total other intangible assets, Foreign Exchange | 1 | |
Total other intangible assets, Ending Balance | 1,127 | $ 1,129 |
Accumulated amortization, Beginning Balance | (687) | (610) |
Accumulated amortization, Additions | (56) | $ (58) |
Accumulated amortization, Retirements | 3 | |
Accumulated amortization, Foreign Exchange | (1) | |
Accumulated amortization, Ending Balance | (741) | $ (668) |
Other intangible assets, net, Beginning Balance | 442 | 519 |
Other intangible assets, net, Additions | $ (56) | $ (58) |
Other Intangible Assets, Retirements | ||
Other intangible assets, net, Foreign Exchange | ||
Other intangible assets, net, Ending Balance | $ 386 | $ 461 |
Customer Loyalty Payments | ||
Other Intangible Assets: | ||
Total other intangible assets, Beginning Balance | 334 | 306 |
Total other intangible assets, Additions | 58 | 86 |
Total other intangible assets, Retirements | (75) | (52) |
Total other intangible assets, Foreign Exchange | (6) | (2) |
Total other intangible assets, Ending Balance | 311 | 338 |
Accumulated amortization, Beginning Balance | (157) | (154) |
Accumulated amortization, Additions | (51) | (56) |
Accumulated amortization, Retirements | $ 75 | $ 52 |
Accumulated amortization, Foreign Exchange | ||
Accumulated amortization, Ending Balance | $ (133) | $ (158) |
Other intangible assets, net, Beginning Balance | 177 | 152 |
Other intangible assets, net, Additions | $ 7 | $ 30 |
Other Intangible Assets, Retirements | ||
Other intangible assets, net, Foreign Exchange | $ (6) | $ (2) |
Other intangible assets, net, Ending Balance | $ 178 | $ 180 |
Intangible Assets - (Detail Tex
Intangible Assets - (Detail Textuals) € in Millions, $ in Millions | Jul. 03, 2015USD ($) | Jul. 03, 2015EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Schedule Of Goodwill And Other Intangible Assets [Line Items] | |||||||
Cash consideration | $ 5 | ||||||
Customer loyalty payments in cash | $ 56 | $ 66 | |||||
Mobile Travel Technologies Ltd. | |||||||
Schedule Of Goodwill And Other Intangible Assets [Line Items] | |||||||
Cash consideration | $ 61 | € 55 | |||||
Customer Loyalty Payments | |||||||
Schedule Of Goodwill And Other Intangible Assets [Line Items] | |||||||
Amount payable for customer loyalty payments | $ 59 | 59 | $ 52 | ||||
Amortization expense | 15 | $ 19 | 51 | 56 | |||
Customer relationships | |||||||
Schedule Of Goodwill And Other Intangible Assets [Line Items] | |||||||
Amortization expense | $ 18 | $ 19 | $ 56 | $ 58 |
Accrued Expenses and Other Cu39
Accrued Expenses and Other Current Liabilities - Summary of Accrued expenses and other current liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued commissions and incentives | $ 280 | $ 260 |
Accrued payroll and related | 68 | 59 |
Deferred revenue | 36 | 27 |
Accrued interest expense | 18 | 18 |
Customer prepayments | 14 | 9 |
Income tax payable | 17 | 16 |
Derivative contracts | 9 | 16 |
Pension and post-retirement benefit liabilities | 1 | 2 |
Other | 20 | 19 |
Accrued expenses and other current liabilities | $ 463 | $ 426 |
Accrued Expenses and Other Cu40
Accrued Expenses and Other Current Liabilities - (Detail Textuals) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Expenses And Other Current Liabilities [Line Items] | ||
Accrued commissions and incentives | $ 280 | $ 260 |
Customer Loyalty Payments | Accrued commissions and incentives | ||
Accrued Expenses And Other Current Liabilities [Line Items] | ||
Accrued commissions and incentives | $ 59 | $ 52 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-term debt (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Capital leases and other indebtedness | $ 140 | $ 93 | |
Total debt | 2,472 | 2,440 | |
Less: current portion | 67 | 56 | |
Long-term debt | $ 2,405 | 2,384 | |
Senior Secured Credit Agreement | Term loans | Dollar denominated | |||
Debt Instrument [Line Items] | |||
Variable interest rate percentage | [1] | 4.75% | |
Interest rate description on variable rate | [1] | L+4.75% | |
Maturity | [1] | Sep. 30, 2021 | |
Long-term debt | [1] | $ 2,332 | $ 2,347 |
Senior Secured Credit Agreement | Revolver borrowings | Dollar denominated | |||
Debt Instrument [Line Items] | |||
Variable interest rate percentage | 5.00% | ||
Interest rate description on variable rate | L+5.00% | ||
Maturity | Sep. 30, 2019 | ||
Long-term debt | |||
[1] | Minimum LIBOR floor of 1.00% |
Long-Term Debt - Summary of L42
Long-Term Debt - Summary of Long-term debt (Parentheticals) (Details) | Sep. 30, 2015 |
Senior Secured Credit Agreement | Term loans | Dollar denominated | |
Debt Instrument [Line Items] | |
LIBOR floor rate | 1.00% |
Long-Term Debt - (Detail Textua
Long-Term Debt - (Detail Textuals) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Mar. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | |||
Repayment of term loans | $ 18 | ||
Amortization of debt finance cost | 5 | ||
Debt discount amortized | 3 | ||
Termination of capital lease obligations | $ 40 | ||
Variable interest rate description | LIBOR | ||
Assets acquired under capital lease | $ 86 | ||
Amount of other indebtedness | 27 | ||
Amount of other indebtedness repaid | $ 1 | ||
Terms of cash collateral | The senior secured credit agreement also permits the issuance of certain cash collateralized letters of credit in addition to those that can be issued under the revolving credit facility, whereby 103% of cash collateral is to be maintained for outstanding letters of credit. | ||
Cash collateral percent of letters of credit | 103.00% | ||
Repayment of capital lease | $ 25 | ||
Term loans | |||
Debt Instrument [Line Items] | |||
Variable interest rate description | The Company’s credit rating improved and, under the terms of the senior secured credit agreement, the applicable rate in respect of its term loans was reduced by 0.25%, with immediate effect. The interest rate applicable to the term loans is currently based on, at the Company’s election, (i) LIBOR plus 4.75% or (ii) base rate (as defined in the agreement) plus 3.75%. | ||
Reduction in term loan rate | 0.25% | ||
Term loans | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 4.75% | ||
Term loans | Base Rate | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 3.75% | ||
Term loans | FLOOR Rate | |||
Debt Instrument [Line Items] | |||
Base floor rate | 2.00% | ||
Revolver borrowings | |||
Debt Instrument [Line Items] | |||
LIBOR floor rate | 1.00% | ||
Revolver borrowings | Senior Secured Credit Agreement | |||
Debt Instrument [Line Items] | |||
Repayment of term loans | $ 30 | ||
Borrowed under credit facility | 30 | 30 | |
Line of credit facility, maximum borrowing capacity | 125 | 125 | |
Utilized letter of credit facility | 24 | 24 | |
Remaining capacity under revolving credit facility | 101 | 101 | |
Sublimit Letter of credit | Senior Secured Credit Agreement | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 50 | $ 50 |
Financial Instruments - Summary
Financial Instruments - Summary of fair value of company's derivative contracts (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 1 | |
Fair Value (Liability) | (9) | $ (16) |
Foreign currency forward contracts | Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | |
Fair Value (Liability) | (10) | $ (16) |
Foreign currency forward contracts | Derivatives not designated as hedging instruments | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | |
Foreign currency forward contracts | Derivatives not designated as hedging instruments | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value (Liability) | (9) | $ (16) |
Foreign currency forward contracts | Derivatives not designated as hedging instruments | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value (Liability) | $ (1) |
Financial Instruments - Summa45
Financial Instruments - Summary of reconciliation of net carrying amount of derivative financial instruments (Details 1) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Net derivative (liability) asset opening balance | $ (16) | $ 10 |
Total loss for the period included in net income (loss) | (15) | (9) |
Total loss for the period accounted through other comprehensive loss | (4) | |
Payments on (proceeds from) settlement of foreign currency derivative contracts | 22 | (6) |
Net derivative liability closing balance | $ (9) | $ (9) |
Financial Instruments - Impact
Financial Instruments - Impact of changes in fair values of derivatives (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivatives designated as hedging instruments: | Interest rate caps | Interest expense, net | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 4 | |||
Amount of Gain (Loss) Recorded in Net Income (Loss) | ||||
Derivatives not designated as hedging instruments | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recorded in Net Income (Loss) | $ (10) | $ (10) | $ (15) | $ (16) |
Derivatives not designated as hedging instruments | Interest rate caps | Interest expense, net | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recorded in Net Income (Loss) | (1) | (9) | ||
Derivatives not designated as hedging instruments | Foreign currency forward contracts | Selling, general and administrative | ||||
Derivatives, Fair Value [Line Items] | ||||
Amount of Gain (Loss) Recorded in Net Income (Loss) | $ (10) | $ (9) | $ (15) | $ (7) |
Financial Instruments - Fair va
Financial Instruments - Fair values of company's other financial instruments (Details 3) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Of Financial Instruments [Line Items] | ||
Derivative assets | $ 1 | |
Derivative liabilities | (9) | $ (16) |
Total debt, Carrying Amount | $ 2,472 | 2,440 |
Carrying Amount | Level 1 | ||
Fair Value Of Financial Instruments [Line Items] | ||
Available-for-sale securities | $ 6 | |
Carrying Amount | Level 2 | ||
Fair Value Of Financial Instruments [Line Items] | ||
Derivative assets | $ 1 | |
Derivative liabilities | (10) | $ (16) |
Total debt, Carrying Amount | $ (2,472) | (2,440) |
Fair Value | Level 1 | ||
Fair Value Of Financial Instruments [Line Items] | ||
Available-for-sale securities | $ 6 | |
Fair Value | Level 2 | ||
Fair Value Of Financial Instruments [Line Items] | ||
Derivative assets | $ 1 | |
Derivative liabilities | (10) | $ (16) |
Total debt, Fair Value | $ (2,489) | $ (2,461) |
Financial Instruments - (Detail
Financial Instruments - (Detail Textuals) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Derivatives, Fair Value [Line Items] | |
Net liability position related to derivative financial instruments | $ (9) |
Floor rate for LIBOR | 1.00% |
Term loan, variable basis rate description | LIBOR |
Probability of default percentage | 6.00% |
Credit default recovery rate percentage | 20.00% |
Credit risk fair value adjustments | 15.00% |
Change in unobservable inputs percentage | 10.00% |
Maximum | |
Derivatives, Fair Value [Line Items] | |
Transactions period of derivative contracts | 2 years |
Foreign Currency Forward Contracts | |
Derivatives, Fair Value [Line Items] | |
Derivative contracts, notional amounts | $ 275 |
Commitments and Contingencies -
Commitments and Contingencies - (Detail Textuals) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase commitments | $ 76 |
Future purchase obligation | $ 48 |
Purchase obligations maturity period | 2,019 |
Equity - Summary of declared ca
Equity - Summary of declared cash dividends (Details) - USD ($) $ / shares in Units, $ in Millions | May. 01, 2015 | Jul. 31, 2015 | Feb. 19, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Dividends Payable [Line Items] | |||||
Dividend Per Share | $ 0.075 | $ 0.225 | |||
Common Stock | |||||
Dividends Payable [Line Items] | |||||
Dividend Per Share | $ 0.075 | $ 0.075 | $ 0.075 | ||
Declaration Date | May 1, 2015 | Jul. 31, 2015 | Feb. 19, 2015 | ||
Record Date | Jun. 5, 2015 | Sep. 3, 2015 | Mar. 5, 2015 | ||
Payment Date | Jun. 18, 2015 | Sep. 17, 2015 | Mar. 19, 2015 | ||
Amount | $ 10 | $ 9 | $ 9 |
Equity (Detail Textuals)
Equity (Detail Textuals) - $ / shares | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Oct. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | |
Equity [Line Items] | |||
Dividend declared | $ 0.075 | $ 0.225 | |
Subsequent Event | |||
Equity [Line Items] | |||
Dividend declared | $ 0.075 | ||
Dividend declared date | Oct. 28, 2015 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of restricted share units (RSUs) (Details) - Restricted Share Units | 9 Months Ended | |
Sep. 30, 2015$ / sharesshares | ||
Restricted Share Units, Number | ||
Balance as of January 1, 2015 | shares | 3,196,422 | |
Granted at fair market value | shares | 133,501 | |
Vested | shares | (1,800,857) | [1] |
Forfeited | shares | (9,000) | |
Balance as of September 30, 2015 | shares | 1,520,066 | |
Restricted Share Units, Weighted Average Grant Date Fair Value | ||
Balance as of January 1, 2015 | $ 18.68 | |
Granted at fair market value | 14.89 | |
Vested | 19.81 | [1] |
Forfeited | 16 | |
Balance as of September 30, 2015 | $ 16.91 | |
[1] | Primarily relates to the vesting of substantially all of the outstanding performance-based restricted share units ("PRSUs") under the 2013 equity-based long-term incentive program upon satisfaction of the performance criteria in April 2015. |
Equity-Based Compensation - Act
Equity-Based Compensation - Activity of stock option (Details 1) - Stock Options | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Stock Options, Number | |
Balance as of January 1, 2015 | shares | 1,270,871 |
Granted at fair market value | shares | 121,117 |
Forfeited | shares | |
Balance as of September 30, 2015 | shares | 1,391,988 |
Stock Options, Weighted Average Grant Date Fair Value | |
Balance as of January 1, 2015 | $ 6.72 |
Granted at fair market value | $ 5.37 |
Forfeited | |
Balance as of September 30, 2015 | $ 6.61 |
Equity-Based Compensation - (De
Equity-Based Compensation - (Detail Textuals) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense credit to equity (deficit) | $ 20 | $ 30 | |
Future equity-based compensation expense | $ 33 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of option outstanding (in shares) | 1,391,988 | 1,270,871 | |
Number of stock options vested and exercisable | 160,000 | ||
Weighted-average exercise price of options granted | $ 14.47 | ||
Remaining weighted average contractual term | 9 years 7 months 24 days |
Income Per Share - Summary of r
Income Per Share - Summary of reconciles numerators and denominators used in the computation of basic and diluted income per share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator - Basic and Diluted EPS: | ||||
Net income attributable to the Company (in dollars) | $ 4 | $ 154 | $ 11 | $ 129 |
Denominator - Basic EPS: | ||||
Weighted average common shares outstanding | 122,495,392 | 88,254,078 | 122,062,715 | 73,701,371 |
Income per share - Basic (in dollars per share) | $ 0.03 | $ 1.75 | $ 0.09 | $ 1.75 |
Denominator - Diluted EPS: | ||||
Number of shares used for Basic EPS | 122,495,392 | 88,254,078 | 122,062,715 | 73,701,371 |
Weighted average effect of dilutive securities | ||||
RSUs | 161,744 | 2,119,936 | 447,081 | 2,327,658 |
Stock Options | 67,005 | 90,637 | 53,563 | 44,352 |
Weighted average common shares outstanding - Diluted | 122,724,141 | 90,464,651 | 122,563,359 | 76,073,381 |
Income per share - Diluted (in dollars per share) | $ 0.03 | $ 1.71 | $ 0.09 | $ 1.70 |
Income Per Share - (Detail Text
Income Per Share - (Detail Textuals) - shares shares in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common share equivalents excluded from the calculation of diluted income per share | 1.1 | 1.1 |
Subsequent Events - (Detail Tex
Subsequent Events - (Detail Textuals) - $ / shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Oct. 08, 2015 | Oct. 07, 2015 | |
Subsequent Event [Line Items] | |||||
Dividend declared | $ 0.075 | $ 0.225 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend declared | $ 0.075 | ||||
Dividend declared date | Oct. 28, 2015 | ||||
Dividend payable date | Dec. 17, 2015 | ||||
Dividend payable record date | Dec. 4, 2015 | ||||
Subsequent Event | Locomote Holdings Pty Ltd | |||||
Subsequent Event [Line Items] | |||||
Percentage of ownership stake | 55.00% | 49.00% |