Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 02, 2017 | |
Document And Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | TripAdvisor, Inc. | |
Trading Symbol | TRIP | |
Entity Central Index Key | 1,526,520 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Common Stock, Unclassified | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 125,952,654 | |
Class B Common Stock | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,799,999 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Income Statement [Abstract] | |||||
Revenue | $ 424 | $ 391 | $ 796 | $ 743 | |
Costs and expenses: | |||||
Cost of revenue | [1] | 20 | 20 | 37 | 36 |
Selling and marketing | [2] | 229 | 202 | 436 | 374 |
Technology and content | [2] | 64 | 63 | 123 | 124 |
General and administrative | [2] | 38 | 34 | 73 | 72 |
Depreciation | 19 | 17 | 38 | 33 | |
Amortization of intangible assets | 8 | 8 | 16 | 15 | |
Total costs and expenses: | 378 | 344 | 723 | 654 | |
Operating income | 46 | 47 | 73 | 89 | |
Other income (expense): | |||||
Interest expense | (4) | (3) | (7) | (6) | |
Interest income and other, net | 2 | 3 | |||
Total other income (expense), net | (2) | (3) | (4) | (6) | |
Income before income taxes | 44 | 44 | 69 | 83 | |
Provision for income taxes | (17) | (10) | (29) | (19) | |
Net income | $ 27 | $ 34 | $ 40 | $ 64 | |
Earnings per share attributable to common stockholders (Note 4): | |||||
Basic | $ 0.19 | $ 0.23 | $ 0.28 | $ 0.44 | |
Diluted | $ 0.19 | $ 0.23 | $ 0.28 | $ 0.44 | |
Weighted average common shares outstanding (Note 4): | |||||
Basic | 140,472 | 145,732 | 142,052 | 145,588 | |
Diluted | 140,937 | 147,060 | 142,827 | 146,982 | |
[1] | Excludes amortization as follows: | ||||
[2] | Includes stock-based compensation expense as follows: |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Costs and expenses: | ||||
Amortization of intangible assets | $ 8 | $ 8 | $ 16 | $ 15 |
Depreciation | 19 | 17 | 38 | 33 |
Amortization adjustment | 15 | 12 | 29 | 24 |
Stock-based compensation: | ||||
Stock-based compensation | 28 | 23 | 47 | 43 |
Selling and Marketing | ||||
Stock-based compensation: | ||||
Stock-based compensation | 6 | 5 | 11 | 10 |
Technology and Content | ||||
Stock-based compensation: | ||||
Stock-based compensation | 13 | 11 | 20 | 21 |
General and Administrative | ||||
Stock-based compensation: | ||||
Stock-based compensation | 9 | 7 | 16 | 12 |
Acquired Technology | ||||
Costs and expenses: | ||||
Amortization of intangible assets | 2 | 1 | 4 | 3 |
Website Development Costs | ||||
Costs and expenses: | ||||
Depreciation | $ 13 | $ 11 | $ 25 | $ 21 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Net income | $ 27 | $ 34 | $ 40 | $ 64 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments | [1] | 13 | (8) | 20 | 1 |
Total other comprehensive income (loss) | 13 | (8) | 20 | 1 | |
Comprehensive income | $ 40 | $ 26 | $ 60 | $ 65 | |
[1] | Foreign currency translation adjustments exclude income taxes due to our practice and intention to indefinitely reinvest the earnings of our foreign subsidiaries in those operations. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents (Note 5) | $ 887 | $ 612 |
Short-term marketable securities (Note 5) | 17 | 118 |
Accounts receivable, net of allowance for doubtful accounts of $11 and $9, respectively | 252 | 189 |
Prepaid expenses and other current assets | 24 | 31 |
Total current assets | 1,180 | 950 |
Long-term marketable securities (Note 5) | 4 | 16 |
Property and equipment, net of accumulated depreciation of $147 and $111, respectively | 266 | 260 |
Intangible assets, net of accumulated amortization of $97 and $80, respectively | 156 | 167 |
Goodwill | 750 | 736 |
Deferred income taxes, net | 47 | 42 |
Other long-term assets | 69 | 67 |
TOTAL ASSETS | 2,472 | 2,238 |
Current liabilities: | ||
Accounts payable | 7 | 14 |
Deferred merchant payables | 344 | 128 |
Deferred revenue | 90 | 64 |
Current portion of debt (Note 6) | 7 | 80 |
Taxes payable | 8 | 10 |
Accrued expenses and other current liabilities (Note 8) | 165 | 127 |
Total current liabilities | 621 | 423 |
Long-term debt (Note 6) | 260 | 91 |
Deferred income taxes, net | 15 | 12 |
Other long-term liabilities | 222 | 210 |
Total Liabilities | 1,118 | 736 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: (Note 10) | ||
Preferred stock, $0.001 par value Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 | ||
Additional paid-in capital | 873 | 831 |
Retained earnings | 985 | 945 |
Accumulated other comprehensive income (loss) | (57) | (77) |
Treasury stock-common stock, at cost, 9,474,490 and 3,395,487 shares, respectively | (447) | (197) |
Total Stockholders’ Equity | 1,354 | 1,502 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,472 | $ 2,238 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 11 | $ 9 |
Property and equipment, accumulated depreciation | 147 | 111 |
Intangible assets, accumulated amortization | $ 97 | $ 80 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,600,000,000 | 1,600,000,000 |
Common stock, shares issued | 135,409,998 | 134,706,467 |
Common stock, shares outstanding | 125,935,508 | 131,310,980 |
Treasury stock, shares | 9,474,490 | 3,395,487 |
Class B Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 12,799,999 | 12,799,999 |
Common stock, shares outstanding | 12,799,999 | 12,799,999 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Millions | Total | Class B Common Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2016 | $ 1,502 | $ 831 | $ 945 | $ (77) | $ (197) | ||
Beginning balance, shares at Dec. 31, 2016 | 131,310,980 | 12,799,999 | 134,706,467 | (3,395,487) | |||
Net income | $ 40 | 40 | |||||
Other comprehensive income | 20 | 20 | |||||
Issuance of common stock related to exercises of options and vesting of RSUs | 3 | 3 | |||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 703,531 | ||||||
Repurchase of common stock | $ (250) | $ (250) | |||||
Repurchase of common stock, shares | (6,079,003) | (6,079,003) | |||||
Withholding taxes on net share settlements of equity awards | $ (14) | (14) | |||||
Stock-based compensation | 53 | 53 | |||||
Ending balance at Jun. 30, 2017 | $ 1,354 | $ 873 | $ 985 | $ (57) | $ (447) | ||
Ending balance, shares at Jun. 30, 2017 | 125,935,508 | 12,799,999 | 135,409,998 | (9,474,490) |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | ||
Net income | $ 40 | $ 64 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of property and equipment, including amortization of internal-use software and website development | 38 | 33 |
Amortization of intangible assets | 16 | 15 |
Stock-based compensation expense | 47 | 43 |
Deferred tax (benefit) expense | (2) | (5) |
Changes in operating assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable, prepaid expenses and other assets | (51) | (51) |
Accounts payable, accrued expenses and other liabilities | 29 | 43 |
Deferred merchant payables | 208 | 179 |
Income tax receivables/payables, net | 5 | 8 |
Deferred revenue | 25 | 34 |
Net cash provided by operating activities | 355 | 363 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (35) | (36) |
Purchases of marketable securities | (7) | (98) |
Sales of marketable securities | 103 | 40 |
Maturities of marketable securities | 17 | 17 |
Other investing activities, net | 1 | |
Net cash provided by (used in) investing activities | 78 | (76) |
Financing activities: | ||
Repurchase of common stock | (250) | (12) |
Proceeds from exercise of stock options | 3 | 3 |
Payment of withholding taxes on net share settlements of equity awards | (14) | (11) |
Net cash used in financing activities | (167) | (129) |
Effect of exchange rate changes on cash and cash equivalents | 9 | (6) |
Net increase in cash and cash equivalents | 275 | 152 |
Cash and cash equivalents at beginning of period | 612 | 614 |
Cash and cash equivalents at end of period | 887 | 766 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Stock-based compensation capitalized with internal-use software and website development costs | 6 | 6 |
2015 Credit Facility | ||
Financing activities: | ||
Proceeds from credit facility, net of financing costs | 373 | |
Payments to credit facility | (206) | $ (109) |
2016 Credit Facility | ||
Financing activities: | ||
Payments to credit facility | $ (73) |
Business Description and Basis
Business Description and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation | NOTE 1: BUSINESS DESCRIPTION AND BASIS OF PRESENTATION We refer to TripAdvisor, Inc. and our wholly-owned subsidiaries as “TripAdvisor,” “the Company,” “us,” “we” and “our” in these notes to the unaudited condensed consolidated financial statements. Description of Business TripAdvisor is an online travel company, empowering users to plan and book the perfect trip. TripAdvisor’s travel platform aggregates reviews and opinions of members about destinations, accommodations, activities and attractions, and restaurants throughout the world so that our users have access to trusted advice wherever their trips take them. Our platform helps users plan their trips with our unique user-generated content and enables users to compare real-time pricing and availability so that they can book hotels, flights, cruises, vacation rentals, activities and attractions, and restaurant reservations. Our flagship brand is TripAdvisor. TripAdvisor-branded websites include tripadvisor.com in the United States and localized versions of the website in 48 markets and 28 languages worldwide. In addition to the flagship TripAdvisor brand, we manage and operate the following 20 other travel media brands, connected by the common goal of providing users the most comprehensive travel-planning and trip-taking resources in the travel industry: www.airfarewatchdog.com, www.bookingbuddy.com, www.citymaps.com, www.cruisecritic.com, www.familyvacationcritic.com, www.flipkey.com, www.thefork.com (including www.lafourchette.com, www.eltenedor.com, www.iens.nl, and www.dimmi.com.au), www.gateguru.com, www.holidaylettings.co.uk, www.holidaywatchdog.com, www.housetrip.com, www.jetsetter.com, www.niumba.com, www.onetime.com, www.oyster.com, www.seatguru.com, www.smartertravel.com, www.tingo.com, www.vacationhomerentals.com, and www.viator.com. We have two reportable segments: Hotel and Non-Hotel. We derive the substantial portion of our revenue from our Hotel segment, through the sale of advertising, primarily through click-based advertising, as well as from commission-based transactions via our instant booking feature, display-based advertising, subscription-based hotel advertising, hotel room reservations sold through our websites, and from content licensing. Our Non-Hotel segment consists of our Attractions, Restaurants, and Vacation Rentals businesses. We derive revenue from our Non-Hotel segment from subscription and commission-based transaction offerings from our Vacation Rental business; destination activities primarily sold through Viator; and online restaurant reservations booked primarily through thefork.com. For further information on our segments see “Note 12: Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include TripAdvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has a variable interest in an affiliated entity in China in order to comply with Chinese laws and regulations, which restrict foreign investment in Internet content provision businesses. Although we do not own the capital stock of this Chinese affiliate, we consolidate its results as we are the primary beneficiary of the cash losses or profits of this variable interest affiliate and have the power to direct the activity of this affiliate. Our variable interest entity is not material for all periods presented. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, all adjustments necessary for a fair presentation of the results of the interim period have been included. These adjustments consist of normal recurring items. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. We prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, we have condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016, previously filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including notes required by GAAP. Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements include: (i) recognition and recoverability of goodwill, intangible and other long-lived assets; (ii) accounting for income taxes; and (iii) stock-based compensation. Seasonality Traveler expenditures in the global travel market tend to follow a seasonal pattern. As such, expenditures by travel advertisers to market to potential travelers and, therefore, our financial performance, or revenue and profits, tend to be seasonal as well. As a result, our financial performance tends to be seasonally highest in the second and third quarters of a year, as it is a key period for leisure travel research and trip-taking, which includes the seasonal peak in traveler hotel and vacation rental stays, and tours and attractions taken, compared to the first and fourth quarters which represent seasonal low points. Further significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES New Accounting Pronouncements Not Yet Adopted In May 2017, the Financial Accounting Standard Board (FASB) issued new accounting guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications which will reduce diversity in practice. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if the award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), the award’s vesting conditions, and the award’s classification as an equity or liability instrument are the same immediately before and after the change. The guidance also states that an entity is not required to estimate the value of the award immediately before and after the change if the change does not affect any of the inputs to the model used to value the award. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and will be applied prospectively to awards modified on or after the adoption date. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance. We are currently evaluating our adoption date of this guidance. Upon adoption, we believe the new guidance will likely result in fewer changes to the terms of an award being accounted for as modifications. In March 2017, the FASB issued new accounting guidance which shortens the amortization period for the premium paid on certain purchased callable debt securities to the earliest call date instead of the bond’s maturity. The amendments do not require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We anticipate adopting this new guidance on January 1, 2019 and based on the composition of our current investment portfolio we do not expect it will have a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued new accounting guidance to clarify the definition of a business and provide additional guidance to assist entities with evaluating whether transactions should be accounted for as asset acquisitions (or asset disposals) or business combinations (or disposals of a business). Under this new guidance, an entity first determines whether substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this criterion is met, the transaction should be accounted for as an asset acquisition as opposed to a business combination. This distinction is important because the accounting for an asset acquisition significantly differs from the accounting for a business combination. This new guidance eliminates the requirement to evaluate whether a market participant could replace missing elements (e.g. inputs or processes), narrows the definition of outputs and requires that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. This new guidance will be effective for us in the first quarter of 2018, with early adoption permitted including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The new guidance will be applied prospectively to any transactions occurring within the period of adoption. We are currently considering the timing of our adoption of this new guidance. Upon adoption, the new guidance will impact how we assess acquisitions (or disposals) of assets or businesses. In January 2017, the FASB issued new accounting guidance to simplify the accounting for goodwill impairment. The new guidance removes Step two of the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill, which requires a hypothetical purchase price allocation, with the carrying amount of that reporting unit’s goodwill. Under this new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The new guidance is effective for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests occurring after January 1, 2017. The new guidance will be applied prospectively. We are currently evaluating this guidance, including the date we will adopt this guidance and what the impact upon adoption will be, if any. In November 2016, the FASB issued new accounting guidance on the classification and presentation of restricted cash in the statement of cash flows to address the diversity in practice. This new guidance requires entities to show changes in cash, cash equivalents and restricted cash on a combined basis in the statement of cash flows. In addition, this accounting guidance requires a reconciliation of the total cash, cash equivalent and restricted cash in the statement of cash flows to the related captions in the balance sheet if cash, cash equivalents and restricted cash are presented in more than one line item in the balance sheet. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. Upon adoption, an entity may apply the new guidance only retrospectively to all prior periods presented in the financial statements. We anticipate adopting this new guidance on January 1, 2018, on a retrospective basis, and do not expect it will have a material impact on our consolidated financial statements and related disclosures. In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity transfers of assets other than inventory. This accounting update, which is part of the FASB's simplification initiative, is intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual reporting period for which interim or annual financial statements have not been issued. Upon adoption, an entity may apply the new guidance only on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We expect to adopt this new guidance on January 1, 2018 and are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements and related disclosures. In August 2016, the FASB issued new accounting guidance which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The new guidance specifically addresses the following cash flow topics in an effort to reduce diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Upon adoption, an entity may apply the new guidance only retrospectively to all prior periods presented in the financial statements. We anticipate adopting this new guidance on January 1, 2018, on a retrospective basis, and we do not expect it will have a material impact on our consolidated financial statements and related disclosures. In June 2016, the FASB issued new accounting guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. For financial assets measured at amortized cost, this new guidance requires an entity to: (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected; (2) recognize this allowance and changes in the allowance during subsequent periods through net income; and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this new guidance made several targeted amendments to the existing other-than-temporary impairment model, including: (1) requiring disclosure of the allowance for credit losses; (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities; (3) limiting impairment to the difference between the amortized cost basis and fair value; and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted, including interim periods within those fiscal years beginning after December 15, 2018. We are currently considering our timing of adoption and in the process of evaluating the impact of adopting this guidance on our consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets (right-of-use-assets) and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. The new guidance will classify leases as either finance or operating leases, with classification determining the presentation of expenses and cash flows on our consolidated financial statements. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. To date, we have made measurable progress toward evaluating the new lease guidance and have begun updating accounting policies, accounting position memos, and evaluating our existing population of contracts to ensure all contracts that meet the definition of a lease contract under the new standard upon adoption are identified. We are also in the process of implementing additional lease software to support our accounting process under the new lease accounting guidance, including the new quantitative and qualitative financial disclosures, and evaluating the impact of this new guidance and resulting system implementation on our internal controls. We will provide further updates as we continue to evaluate the impact that this new guidance will have, if any, on the Company’s consolidated financial statements and related disclosures In January 2016, the FASB issued a new accounting update which amends the guidance on the classification and measurement of financial instruments. Although the accounting update retains many current requirements, it significantly revises accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The accounting update also amends certain fair value disclosures of financial instruments and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale debt securities in combination with the entity’s evaluation of their other deferred tax assets. The update requires entities to carry all investments in equity securities, including other ownership interests such as partnerships, unincorporated joint ventures and limited liability companies at fair value, with fair value changes recognized through net income. This requirement does not apply to investments that qualify for equity method accounting, investments that result in consolidation of the investee or investments in which the entity has elected the practicability exception to fair value measurement. Under current GAAP, available-for-sale investments in equity securities, with a readily determinable fair value, are re-measured to fair value each reporting period with changes in fair value recognized in accumulated other comprehensive income (loss). However, under the new guidance, fair value adjustments will be recognized through net income. For equity securities currently accounted for under the cost method (as they do not have a readily determinable fair value), the new guidance requires those equity investments to be carried at fair value with changes in net income, unless an entity elects to measure those investments, at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company intends to elect this measurement alternative for equity securities without a readily determinable fair value. Additionally, this accounting update will simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. In addition, this accounting update eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is currently required to be disclosed for financial instruments measured at amortized cost in the balance sheet. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. Upon adoption, an entity will apply the new guidance on a modified retrospective basis, which is to record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted, with two exceptions. The amendments related to equity investments without readily determinable fair values (including disclosure requirements) will be effective prospectively. The requirement to use the exit price notion to measure the fair value of financial instruments for disclosure purposes will also be applied prospectively. We anticipate adopting this new guidance on January 1, 2018 and based on the composition of our current holdings, we do not expect the adoption of this guidance will have a material impact on our consolidated financial statements and related disclosures. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers which will replace numerous requirements in GAAP, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued additional guidance which clarifies principal versus agent considerations and, in April 2016, the FASB issued further guidance which clarifies the identification of performance obligations and the implementation guidance for licensing. The two permitted transition methods under this new accounting guidance are the full retrospective method, in which case the guidance would be applied to each prior reporting period presented and the cumulative effect of applying the guidance would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the guidance would be recognized at the date of initial application. We plan on adopting this new guidance on January 1, 2018 and we currently anticipate adopting the standard under the modified retrospective method, To date, we have made significant progress toward completing our evaluation of the potential changes from adopting the new standard on our future financial reporting and disclosures. We have established a cross-functional implementation team from across our organization and have made significant progress in the review of our contracts portfolio and our current accounting policies and practices to identify potential differences that could result from applying the requirements of the new standard to our revenue contracts. To date, we have evaluated the majority of our Hotel segment revenue and based on the Company's preliminary analysis; we currently do not expect a material impact to the timing or amount of our revenue recognition upon adoption of the new guidance. In addition, we do not expect any major reengineering required to our accounting systems or internal controls related to our Hotel segment. While we have made significant progress, we are still evaluating portions of our Hotel segment revenue and all of our non-Hotel revenue and the impact that this new guidance will have, if any, on the Company’s timing and/or amount of revenue recognition, including internal processes, systems, controls, and changes that may be required to support the new disclosure requirements upon adoption of this new guidance. We will continue to update our assessment of the effect that the new revenue guidance will have on our consolidated financial statements, disclosures and related controls, and will disclose any material effects, if any, when known. Recently Adopted Accounting Pronouncements In October 2016, the FASB issued new accounting guidance which amends the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity should treat indirect interests in the entity held through related parties that are under common control within the reporting entity when determining whether it is the primary beneficiary of that variable interest entity. We adopted this new guidance on January 1, 2017, on a retrospective basis, with no impact on our consolidated financial statements and related disclosures. There have been no material changes to our significant accounting policies since December 31, 2016. For additional information about our accounting policies and estimates, refer to “Note 2: Significant Accounting Policies”, in the notes to our consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016. |
Stock Based Awards and Other Eq
Stock Based Awards and Other Equity Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Awards and Other Equity Instruments | NOTE 3: STOCK BASED AWARDS AND OTHER EQUITY INSTRUMENTS Stock-Based Compensation Expense The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and restricted stock units (“RSUs”), on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 (in millions) (in millions) Selling and marketing $ 6 $ 5 $ 11 $ 10 Technology and content 13 11 20 21 General and administrative 9 7 16 12 Total stock-based compensation 28 23 47 43 Income tax benefit from stock-based compensation (10 ) (8 ) (17 ) (15 ) Total stock-based compensation, net of tax effect $ 18 $ 15 $ 30 $ 28 During both the three and six months ended June 30, 2017 and 2016, respectively, we capitalized $3 million and $6 million of stock-based compensation expense as internal-use software and website development costs. Stock-Based Award Activity and Valuation 2017 Stock Option Activity During the six months ended June 30, 2017, we have issued 1,502,240 service-based non-qualified stock options under the Company’s Amended and Restated 2011 Stock and Annual Incentive Plan (the “2011 Incentive Plan”). These stock options generally have a term of ten years from the date of grant and generally vest equally over a four-year requisite service period. The following table presents a summary of our stock option activity during the six months ended June 30, 2017: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life Value (in thousands) (in years) (in millions) Options outstanding at December 31, 2016 5,818 $ 57.60 Granted 1,502 42.88 Exercised (1) (404 ) 30.34 Cancelled or expired (383 ) 75.44 Options outstanding at June 30, 2017 6,533 $ 54.89 6.7 $ 6 Exercisable as of June 30, 2017 2,856 $ 47.75 4.6 $ 6 Vested and expected to vest after June 30, 2017 (2) 6,533 $ 54.89 6.7 $ 6 (1) Inclusive of 241,626 of options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares that had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on The NASDAQ Global Select Market as of June 30, 2017 was $38.20. The total intrinsic value of stock options exercised was $6 million and $19 million, for the six months ended June 30, 2017 and 2016, respectively. The fair value of stock option grants under the 2011 Incentive Plan has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Risk free interest rate 1.87 % 1.08 % 1.91 % 1.20 % Expected term (in years) 5.32 4.31 5.35 4.84 Expected volatility 40.93 % 42.09 % 41.52 % 41.82 % Expected dividend yield — % — % — % — % The weighted-average grant date fair value of options granted was $16.56 and $17.19 for the three and six months ended June 30, 2017, respectively. The weighted-average grant date fair value of options granted was $20.42 and $22.85 for the three and six months ended June 30, 2016, respectively. The total fair value of stock options vested was $15 million and $25 million, for the six months ended June 30, 2017 and 2016, respectively. Cash received from stock option exercises was $3 million for both the six months ended June 30, 2017 and 2016, respectively. On June 5, 2017, the Section 16 Committee of our Board of Directors approved an amendment to the nonqualified stock option award (the “Option”) granted on August 28, 2013 to Stephen Kaufer, the Company’s President and Chief Executive Officer. The amendment provides that the Option will expire on the tenth anniversary, instead of the seventh anniversary, of the grant date. Vesting conditions under the Option were not affected by this amendment. As a result of the modification, incremental fair value of $5 million will be recognized to stock-based compensation expense on a straight-line basis over the remaining vesting term, which is August 2018. 2017 RSU Activity During the six months ended June 30, 2017, we issued 4,001,615 RSUs under the 2011 Incentive Plan for which the fair value was measured based on the quoted price of our common stock on the date of grant. These RSUs generally vest over a four-year requisite service period. The following table presents a summary of our RSU activity during the six months ended June 30, 2017: Weighted Average Grant- Aggregate RSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested RSUs outstanding as of December 31, 2016 2,856 $ 69.35 Granted 4,002 42.88 Vested and released (1) (791 ) 67.73 Cancelled (332 ) 58.64 Unvested RSUs outstanding as of June 30, 2017 5,735 $ 51.72 $ 219 Expected to vest after June 30, 2017 (2) 5,735 $ 51.72 $ 219 (1) Inclusive of 231,022 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our expected to vest calculation unless necessary for a performance condition award. Total current income tax benefits associated with the exercise or settlement of TripAdvisor stock-based awards held by our employees were $1 million and $15 million for the three and six months ended June 30, 2017, respectively and $3 million and $16 million for the three and six months ended June 30, 2016, respectively. Unrecognized Stock-Based Compensation A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2017 related to our non-vested stock options and RSU awards is presented below: Stock Options RSUs Unrecognized compensation expense (in millions) $ 59 $ 258 Weighted average period remaining (in years) 2.6 3.2 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 4: EARNINGS PER SHARE Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share (“Basic EPS”) by dividing net income by the weighted average number of common shares outstanding during the period. We compute the weighted average number of common shares outstanding during the reporting period using the total of common stock and Class B common stock outstanding as of the last day of the previous year end reporting period plus the weighted average of any additional shares issued and outstanding less the weighted average of any common shares repurchased during the reporting period. Diluted Earnings Per Share Attributable to Common Stockholders Diluted earnings per share (“Diluted EPS”) include the potential dilution of common equivalent shares outstanding that could occur from stock-based awards and other stock-based commitments using the treasury stock method. We compute Diluted EPS by dividing net income by the sum of the weighted average number of common and common equivalent shares outstanding during the period. We computed the weighted average number of common and common equivalent shares outstanding during the period using the sum of (i) the number of shares of common stock and Class B common stock used in the basic earnings per share calculation as indicated above, and (ii) if dilutive, the incremental weighted average common stock that we would issue upon the assumed exercise of outstanding common equivalent shares related to stock options and the vesting of restricted stock units using the treasury stock method, and (iii) if dilutive, performance based awards based on the number of shares that would be issuable as of the end of the reporting period assuming the end of the reporting period was also the end of the contingency period. Under the treasury stock method, the assumed proceeds calculation includes the actual proceeds to be received from the employee upon exercise of outstanding equity awards and the average unrecognized compensation cost during the period. The treasury stock method assumes that a company uses the proceeds from the exercise of an equity award to repurchase common stock at the average market price for the reporting period. Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Numerator: Net income $ 27 $ 34 $ 40 $ 64 Denominator: Weighted average shares used to compute Basic EPS 140,472 145,732 142,052 145,588 Weighted average effect of dilutive securities: Stock options 228 1,060 372 1,123 RSUs 237 268 403 271 Weighted average shares used to compute Diluted EPS 140,937 147,060 142,827 146,982 Basic EPS $ 0.19 $ 0.23 $ 0.28 $ 0.44 Diluted EPS $ 0.19 $ 0.23 $ 0.28 $ 0.44 The following potential common shares related to stock options and RSUs were excluded from the calculation of Diluted EPS (in thousands) because their effect would have been anti-dilutive for the periods presented: Three months ended June 30, Six months ended June 30, 2017(1) 2016(2) 2017(1) 2016(2) Stock options 4,801 3,055 4,617 2,963 RSUs 2,050 682 2,032 784 Total 6,851 3,737 6,649 3,747 (1) These totals do not include 125,000 performance-based options representing the right to acquire the equivalent number of shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. (2) These totals do not include 125,000 performance-based options and 12,799 performance based RSUs representing the right to acquire 137,799 shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. The earnings per share amounts are the same for common stock and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Investments All Other Investments [Abstract] | |
Financial Instruments | NOTE 5: FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Marketable Securities The following tables show our cash and available-for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long-term marketable securities as of the dates presented (in millions): June 30, 2017 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 885 $ - $ - $ 885 $ 885 $ - $ - Level 1: Money market funds 1 - - 1 1 - - Level 2: U.S. agency securities 3 - - 3 - 2 1 U.S. treasury securities 2 - - 2 - 2 - Certificates of deposit 1 - - 1 - 1 - Commercial paper 1 - - 1 1 - - Corporate debt securities 15 - - 15 - 12 3 Subtotal 22 - - 22 1 17 4 Total $ 908 $ - $ - $ 908 $ 887 $ 17 $ 4 December 31, 2016 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 595 $ - $ - $ 595 $ 595 $ - $ - Level 1: Money market funds 17 - - 17 17 - - Level 2: U.S. agency securities 23 - - 23 - 21 2 U.S. treasury securities 8 - - 8 - 8 - Certificates of deposit 16 - - 16 - 15 1 Commercial paper 5 - - 5 - 5 - Corporate debt securities 82 - - 82 - 69 13 Subtotal 134 - - 134 - 118 16 Total $ 746 $ - $ - $ 746 $ 612 $ 118 $ 16 Our cash and cash equivalents consist of cash on hand in global financial institutions, money market funds and marketable securities with maturities of 90 days or less at the date purchased. The remaining maturities of our long-term marketable securities range from one to three years and our short-term marketable securities include maturities that were greater than 90 days at the date purchased and have 12 months or less remaining at June 30, 2017 and December 31, 2016, respectively. We classify our cash equivalents and marketable securities within Level 1 and Level 2 as we value our cash equivalents and marketable securities using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we used to measure the fair value of money market funds were derived from quoted prices in active markets for identical assets or liabilities. Fair values for Level 2 investments are considered “Level 2” valuations because they are obtained from independent pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our independent pricing services against fair values obtained from another independent source. There were no material realized gains or losses related to sales of our marketable securities for the three and six months ended June 30, 2017 and 2016, respectively. Realized gains and losses on the sale of securities were determined by specific identification of each security’s cost basis. We consider any individual investments in an unrealized loss position to be temporary in nature and do not consider any of our investments other-than-temporarily impaired as of June 30, 2017. Derivative Financial Instruments In certain circumstances, we enter into foreign currency forward exchange contracts, or forward contracts, to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. We do not use derivatives for trading or speculative purposes. Our current forward contracts are not designated as hedges and have current maturities of less than 90 days. Consequently, any gain or loss resulting from the change in fair value was recognized in our unaudited condensed consolidated statement of operations. The net gain or loss related to our settled and outstanding forward contracts for the three and six months ended June 30, 2017 were not material. We recorded a net gain of $2 million and $1 million for the three and six months ended June 30, 2016, respectively, related to our settled and outstanding forward contracts in “Interest income and other, net” on our unaudited condensed consolidated statements of operations. The following table shows the notional principal amounts of our outstanding derivative instruments that are not designated as hedging instruments as of the dates presented: June 30, 2017 December 31, 2016 (in millions) Foreign exchange-forward contracts (1), (2) $ 5 $ 6 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. Dollar. The Company was entered into one and two outstanding derivative contracts as of June 30, 2017 and December 31, 2016, respectively. (2) The fair value of our derivatives was not material as of June 30, 2017 and December 31, 2016, respectively. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. Counterparties to our foreign currency exchange derivatives consist of major international financial institutions. We monitor our positions and the credit ratings of the counterparties involved and, by policy limits, the amount of credit exposure to any one party. While we may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated and any credit risk amounts associated with our outstanding or unsettled derivative instruments are deemed to be not material for any period presented. Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include accounts receivable, accounts payable, deferred merchant payables, short-term debt, accrued and other current liabilities and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value because of the short maturity of these instruments as reported on our unaudited condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016, respectively. The carrying value of the long-term debt from our 2015 Credit Facility bears interest at a variable rate and therefore is also considered to approximate fair value. We also hold investments in equity securities of privately-held companies of approximately $14 million at June 30, 2017 and December 31, 2016, respectively. These investments are accounted for under the cost method and included in "Other long-term assets" in the Company's unaudited condensed consolidated balance sheet. Under the cost method, investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, certain distributions, and additional investments. We did not have any Level 3 assets or liabilities at June 30, 2017 and December 31, 2016. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6: DEBT The Company’s outstanding debt consisted of the following as of the dates presented: June 30, December 31, 2017 2016 (in millions) Short-Term Debt: Chinese Credit Facilities $ 7 $ 7 2016 Credit Facility - 73 Total Short-Term Debt $ 7 $ 80 Long-Term Debt: 2015 Credit Facility $ 260 $ 91 Total Long-Term Debt $ 260 $ 91 2015 Credit Facility In June 2015, we entered into a five year credit agreement with a group of lenders which, among other things, provided for a $1 billion unsecured revolving credit facility (the “2015 Credit Facility”). On May 12, 2017, the 2015 Credit Facility was amended to, among other things, (i) increase the aggregate amount of revolving loan commitments available from $1.0 billion to $1.2 billion; and (ii) extend the maturity date of the 2015 Credit Facility from June 26, 2020 to May 12, 2022 (the “First Amendment”). Borrowings under the 2015 Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing; plus an applicable margin ranging from 1.25% to 2.00% (“Eurocurrency Spread”), based on the Company’s leverage ratio; or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%; in addition to an applicable margin ranging from 0.25% to 1.00% (“ABR Spread”), based on the Company’s leverage ratio. The Company may borrow from the revolving credit facility in U.S dollars, Euros and British pound sterling. There is no specific repayment date prior to the maturity date for borrowings under this credit agreement. During the six months ended June 30, 2017, the Company borrowed an additional $375 million and repaid $206 million of our outstanding borrowings under the 2015 Credit Facility. These net borrowings during the year were primarily used to repurchase shares of our outstanding common stock under the Company’s repurchase program, which is described in “Note 10: Stockholders Equity”. As of June 30, 2017, based on the Company’s leverage ratio, our borrowings bear interest at LIBO rate; plus an applicable margin of 1.25%, or the Eurocurrency Spread. The Company is currently borrowing under a one-month interest rate period or a weighted average rate of 2.37% per annum as of June 30, 2017, using a one-month interest period Eurocurrency Spread, which will reset periodically. Interest will be payable on a monthly basis while the Company is borrowing under the one-month interest rate period. We are also required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15% to 0.30%, on the daily unused portion of the revolving credit facility for each fiscal quarter and additional fees in connection with the issuance of letters of credit. As of June 30, 2017, our unused revolver capacity is subject to a commitment fee of 0.15%, given the Company’s leverage ratio. The 2015 Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for Swing Line borrowings on same-day notice. As of June 30, 2017, we had issued $3 million of outstanding letters of credit under the 2015 Credit Facility. We recorded total interest expense and commitment fees on our 2015 Credit Facility of $2 million and $3 million for the three and six months ended June 30, 2017, respectively and $1 million and $3 million for the three and six months ended June 30, 2016, respectively, to “Interest expense” on our unaudited condensed consolidated statements of operations. All unpaid interest and commitment fee amounts as of June 30, 2017 and December 31, 2016, respectively, were not material. In connection with the First Amendment, we incurred additional lender fees and debt financing costs totaling $2 million, which were capitalized as deferred financing costs and recorded to other long-term assets on the unaudited consolidated balance sheet. As of June 30, 2017, the Company has $4 million remaining in deferred financing costs in connection with the 2015 Credit Facility. These costs will be amortized over the remaining term using the effective interest rate method and recorded to “Interest expense” on our unaudited consolidated statements of operations. The resulting write down of previous deferred financing costs as a result of the First Amendment was not material. We may voluntarily repay any outstanding borrowing under the 2015 Credit Facility at any time without premium or penalty, other than customary breakage costs with respect to Eurocurrency loans. Certain wholly-owned domestic subsidiaries of the Company have agreed to guarantee the Company’s obligations under the 2015 Credit Facility. The 2015 Credit Facility contains a number of covenants that, among other things, restrict our ability to: incur additional indebtedness, create liens, enter into sale and leaseback transactions, engage in mergers or consolidations, sell or transfer assets, pay dividends and distributions, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change our fiscal year. The 2015 Credit Facility also requires us to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the 2015 Credit Facility will be entitled to take various actions, including the acceleration of all amounts due under the 2015 Credit Facility. Additionally, the 2015 Credit Facility includes a subjective acceleration clause, which could be triggered by the lenders if a representation, warranty or statement made by the Company proves to be incorrect in any material respect, which in turn would permit the lenders to accelerate repayment of any outstanding obligations. The Company believes that the likelihood of the lender exercising this right is remote and, as such, we classify borrowings under this facility as long-term debt. As of June 30, 2017, we were in compliance with all of our debt covenants. 2016 Credit Facility In September 2016, we entered into an uncommitted facility agreement, which provides for a $73 million unsecured revolving credit facility (the “2016 Credit Facility”) with no specific expiration date. The 2016 Credit Facility is available at the lender’s discretion and can be canceled at any time. Repayment terms for borrowings under the 2016 Credit Facility are generally one to six month periods or such other periods as the parties may mutually agree and bear interest at LIBOR plus 112.5 basis points. The Company may borrow from the 2016 Credit Facility in U.S dollars only and we may voluntarily repay any outstanding borrowing at any time without premium or penalty. Any overdue amounts under or in respect of the 2016 Credit Facility not paid when due shall bear interest in the case of principal at the applicable interest rate plus 1.50% per annum. In addition, TripAdvisor, LLC, a wholly-owned domestic subsidiary of the Company, has agreed to guarantee the Company’s obligations under the 2016 Credit Facility. There are no specific financial or incurrence covenants. The Company repaid all outstanding borrowings during the first three months of 2017, and as of June 30, 2017, we had no outstanding borrowings under the 2016 Credit Facility. During the three and six months ended June 30, 2017, total interest recorded with respect to our 2016 Credit Facility to “Interest expense” on our unaudited condensed consolidated statement of operations was not material. Chinese Credit Facilities In addition to our borrowings under the 2015 Credit Facility and 2016 Credit Facility, we maintain two credit facilities in China (jointly, the “Chinese Credit Facilities”). As of June 30, 2017 and December 31, 2016, we had short-term borrowings outstanding of $7 million, respectively. We are parties to a $30 million, one-year revolving credit facility with Bank of America (the “Chinese Credit Facility—BOA”) that is currently subject to review on a periodic basis with no specific expiration period. Borrowings under our Chinese Credit Facility—BOA generally bear interest at a rate based on People’s Bank of China benchmark, including certain adjustments which may be made in accordance with the market condition at the time of borrowing. As of June 30, 2017, there were no outstanding borrowings under our Chinese Credit Facility—BOA. We are also parties to a RMB 70,000,000 (approximately $10 million), one-year revolving credit facility with J.P. Morgan Chase Bank (“Chinese Credit Facility—JPM”). Borrowings under our Chinese Credit Facility—JPM generally bear interest at a rate based on People’s Bank of China benchmark, including certain adjustments which may be made in accordance with the market condition at the time of borrowing. As of June 30, 2017, we had $7 million of outstanding borrowings from the Chinese Credit Facility – JPM at a weighted average rate of 4.47%. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7: INCOME TAXES Each interim period is considered an integral part of the annual period and, accordingly, we measure our income tax expense using an estimated annual effective tax rate. An enterprise is required, at the end of each interim reporting period, to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim period. Our effective tax rate for the three and six months ended June 30, 2017 was 38.6% and 42.0%, respectively. Our effective tax rate for the three and six months ended June 30, 2016 was 22.7% and 22.9%, respectively. Our policy is to recognize accrued interest and penalties related to unrecognized tax benefits and income tax liabilities as part of our income tax expense. As of June 30, 2017, accrued interest is $7 million, net of federal and state benefit, and no penalties have been accrued. By virtue of previously filed consolidated income tax returns filed with Expedia, we are currently under an I In January 2017, we received Notices of Proposed Adjustment from the IRS for the 2009 and 2010 tax years. These proposed adjustments are related to certain transfer pricing arrangements with our foreign subsidiaries, and would result in an increase to our worldwide income tax expense in an estimated range totaling $10 million to $14 million for those specific years, after consideration of competent authority relief, exclusive of interest and penalties. We disagree with the proposed adjustments and we intend to defend our position through applicable administrative and, if necessary, judicial remedies. During the quarter ending June 30, 2017, we filed a request for Mutual Agreement Procedure consideration under Article 26 of the United States / United Kingdom Income Tax Convention and Rev. Proc. 2015-40, 2015-35 I.R.B. 236. Our policy is to review and update tax reserves as facts and circumstances change. Based on our interpretation of the regulations and available case law, we believe the position we have taken with regard to transfer pricing with our foreign subsidiaries is sustainable. In addition to the risk of additional tax for 2009 and 2010 transactions, if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we could be subject to significant additional tax liabilities. In July 2015, the United States Tax Court (the “Court”) issued an opinion favorable to Altera Corporation (“Altera”) with respect to Altera’s litigation with the IRS. This opinion was submitted as a final decision under Tax Court Rule 155 during December 2015. The litigation relates to the treatment of stock-based compensation expense in an inter-company cost-sharing arrangement with Altera’s foreign subsidiary. In its opinion, the Court accepted Altera’s position of excluding stock based compensation from its inter-company cost-sharing arrangement. The IRS appealed the Court decision on February 19, 2016. At this time, the U.S. Department of the Treasury has not withdrawn the requirement from its regulations to include stock-based compensation in intercompany cost-sharing arrangements. The Company recorded a tax benefit, . |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 8: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following as of the dates presented: June 30, 2017 December 31, 2016 (in millions) Accrued salary, bonus, and related benefits $ 42 $ 53 Accrued marketing costs 69 37 Other 54 37 Total $ 165 $ 127 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9: COMMITMENTS AND CONTINGENCIES There have been no material changes to our commitments and contingencies since December 31, 2016. Refer to “Note 13: Commitments and Contingencies,” in the notes to our consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016. Legal Proceedings In the ordinary course of business, we are parties to regulatory and legal matters arising out of our operations. These matters may involve claims involving alleged infringement of third-party intellectual property rights (including patent infringement), defamation, taxes, regulatory compliance, privacy issues and other claims. Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred; and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. We provide disclosures in the notes to the consolidated financial statements for loss contingencies that do not meet both of these conditions if there is a reasonable probability that a loss may have been incurred and whether such loss is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. Although occasional adverse decisions or settlements may occur, the Company does not believe that the final disposition of any of these matters will have a material adverse effect on the business. However, the final outcome of these matters could vary significantly from our estimates. Finally, there may be claims or actions pending or threatened against us of which we are currently not aware and the ultimate disposition of which could have a material adverse effect on us. Income Taxes We are also under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax matters. We have reserved for potential adjustments to our provision for income taxes that may result from examinations by, or any negotiated agreements with, these tax authorities. Although we believe our tax estimates are reasonable, the final determination of audits could be materially different from our historical income tax provisions and accruals. The results of an audit could have a material effect on our financial position, results of operations, or cash flows in the period for which that determination is made. Additionally, we continue to accumulate positive cash flows in foreign jurisdictions, which we consider indefinitely reinvested. Any repatriation of funds currently held in foreign jurisdictions may result in higher effective tax rates and incremental cash tax payments. In addition, there have been proposals to amend U.S. tax laws that would significantly impact the manner in which U.S. companies are taxed on foreign earnings. Although we cannot predict whether or in what form any legislation will pass, if enacted, it could have a material adverse impact on our U.S. tax expense and cash flows. See “Note 7: Income Taxes” above for further information on potential contingencies surrounding income taxes. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 10: STOCKHOLDERS’ EQUITY On January 25, 2017, our Board of Directors authorized the repurchase of $250 million of our shares of common stock under a new share repurchase program. Our Board of Directors authorized and directed management, working with the Executive Committee of our Board of Directors to affect the share repurchase program in compliance with applicable legal requirements. As of June 30, 2017, we have repurchased a total of 6,079,003 shares of the Company’s outstanding common stock at an average share price of $41.13, or $250 million in the aggregate, and completed this share repurchase program. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11: RELATED PARTY TRANSACTIONS We consider Liberty TripAdvisor Holdings, Inc. (“LTRIP”) a related party. As of June 30, 2017, LTRIP beneficially owned approximately 18.2 million shares of our common stock and 12.8 million shares of our Class B common stock, which shares constitute 14.4% of the outstanding shares of common stock and 100% of the outstanding shares of Class B common stock. Assuming the conversion of all of LTRIP’s shares of Class B common stock into common stock, LTRIP would beneficially own 22.3% of the outstanding common stock. Because each share of Class B common stock generally is entitled to ten votes per share and each share of common stock is entitled to one vote per share, LTRIP may be deemed to beneficially own equity securities representing 57.6% of our voting power. We had no related party transactions with LTRIP during the six months ended June 30, 2017 and 2016. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12: SEGMENT INFORMATION Our reporting structure includes two reportable segments: Hotel and Non-Hotel. Hotel Our Hotel segment includes revenue generated from the following sources: • TripAdvisor-branded Click-based and Transaction Revenue. Our largest source of Hotel segment revenue is generated from click-based advertising on TripAdvisor-branded websites, which is primarily comprised of contextually-relevant booking links to our partners’ sites. Our click-based advertising partners are predominantly online travel agencies, or OTAs, and direct suppliers in the hotel product category. Click-based advertising is generally priced on a cost-per-click, or “CPC”, basis, with payments from advertisers determined by the number of users who click on a link multiplied by the price that partner is willing to pay for that click, or hotel shopper lead. CPC rates are determined in a dynamic, competitive auction process that enables our partners to use our proprietary, automated bidding system to submit CPC bids to have their hotel rates and availability listed on our site. Transaction revenue is generated from our instant booking feature, which enables the merchant of record, generally an OTA or hotel partner, to pay a commission to TripAdvisor for a user that completes a hotel reservation on our website. • TripAdvisor-branded Display-based Advertising and Subscription Revenue. Advertising partners can promote their brands in a contextually-relevant manner through a variety of display-based advertising placements on our websites. Our display-based advertising clients are predominately direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations. We also accept display-based advertising from OTAs and attractions, as well as advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions, or CPM, basis. Subscription-based advertising is offered to hotels, B&Bs and other specialty lodging properties. This advertising product is sold for a flat fee and enables subscribers to list, for a contracted period of time, a website URL, email address and phone number on our TripAdvisor-branded websites, as well as to post special offers for travelers. • Other Hotel Revenue. Our other hotel revenue primarily includes revenue from non-TripAdvisor branded websites, such as smartertravel.com, independenttraveler.com, and bookingbuddy.com, which includes click-based advertising revenue, display-based advertising revenue, hotel room reservations sold through these websites, and advertising revenue from making cruise reservations available for price comparison and booking. Non-Hotel Our Non-Hotel segment consists of the aggregation of three operating segments, our Attractions, Restaurants and Vacation Rentals businesses. Attractions. We provide information and services for users to research and book activities and attractions in popular travel destinations through our dedicated Attractions business, Viator, as well as on our TripAdvisor website and applications. We generate revenue by charging the operators a commission for each transaction we facilitate through our online reservation systems. In addition to its consumer-direct business, Viator also powers activity and attractions booking capabilities to its affiliate partners, including some of the world’s top airlines, hotel chains and online and offline travel agencies. Viator’s bookable inventory is available on www.viator.com as well as TripAdvisor-branded websites and mobile applications. Restaurants. We provide information and services for users to research and book restaurants in popular travel destinations through our dedicated restaurant reservations business, TheFork, as well as on our TripAdvisor website and applications. TheFork is an online restaurant booking platform operating on a number of sites (including www.lafourchette.com, www.eltenedor.com, www.iens.nl, www.besttables.com, www.dimmi.com.au, and www.en.couverts.nl), with a network of restaurant partners primarily across Europe and Australia. We generate revenue by charging our restaurant partners a fee for each restaurant guest, or seated diner, that we facilitate through our online reservation systems. TheFork also provides flexible online booking and a premium data and analytics tool, for which the restaurant owner pays a subscription fee. TheFork’s bookable inventory is also available on TripAdvisor-branded websites and mobile applications. Vacation Rentals . We provide information and services for users to research and book vacation and short-term rental properties, including full home rentals, condominiums, villas, beach rentals, cabins and cottages. The Vacation Rentals business generates revenue by offering individual property owners and property managers, the ability to list their properties on our websites and mobile applications through a free-to-list, commission-based option, and to a lesser extent, an annual subscription-based fee structure. These properties are listed on a number of platforms, including www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, as well as on our TripAdvisor-branded websites. Our operating segments are determined based on how our chief operating decision maker manages our business, regularly assesses information and evaluates performance for operating decision-making purposes, including allocation of resources. The chief operating decision maker for the Company is our Chief Executive Officer. Our chief operating decision maker is also our Hotel segment manager. Each Non-Hotel operating segment has a segment manager who is directly accountable to and maintains regular contact with our chief operating decision maker to discuss operating activities, financial results, forecasts, and plans for the segment. Adjusted EBITDA is our segment profit measure and a key measure used by our management and board of directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. The following tables present our segment information for the three and six months ended June 30, 2017 and 2016, and include a reconciliation of Adjusted EBITDA to Net Income. We record depreciation of property and equipment, including amortization of internal-use software and website development, amortization of intangible assets, stock-based compensation and other stock-settled obligations, other income (expense), net, other non-recurring expenses and income, net, and income taxes, which are excluded from segment operating performance, in corporate and unallocated. In addition, we do not report our assets, capital expenditures and related depreciation expense by segment as our chief operating decision maker does not evaluate operating segments using this information. We also do not regularly provide such information by segment to our chief operating decision maker. Intersegment revenue is not material and, in addition, already eliminated in the information by segment provided to our chief operating decision maker. Our consolidated general and administrative expenses, excluding stock-based compensation costs, are shared by all operating segments. Each operating segment receives an allocated charge based on the segment’s percentage of the Company’s total personnel costs. Three months ended June 30, 2017 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 326 $ 98 $ - $ 424 Adjusted EBITDA (1) 84 17 - 101 Depreciation (19 ) (19 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (28 ) (28 ) Operating income (loss) 46 Other expense, net (2 ) Income before income taxes 44 Provision for income taxes (17 ) Net income $ 27 Three months ended June 30, 2016 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 316 $ 75 $ - $ 391 Adjusted EBITDA (2) 105 (10 ) - 95 Depreciation (17 ) (17 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (23 ) (23 ) Operating income (loss) 47 Other expense, net (3 ) Income before income taxes 44 Provision for income taxes (10 ) Net income $ 34 Six months ended June 30, 2017 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 640 $ 156 $ - $ 796 Adjusted EBITDA (1) 172 2 - 174 Depreciation (38 ) (38 ) Amortization of intangible assets (16 ) (16 ) Stock-based compensation (47 ) (47 ) Operating income (loss) 73 Other expense, net (4 ) Income before income taxes 69 Provision for income taxes (29 ) Net income $ 40 Six months ended June 30, 2016 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 619 $ 124 $ - $ 743 Adjusted EBITDA (2) 211 (31 ) - 180 Depreciation (33 ) (33 ) Amortization of intangible assets (15 ) (15 ) Stock-based compensation (43 ) (43 ) Operating income (loss) 89 Other expense, net (6 ) Income before income taxes 83 Provision for income taxes (19 ) Net income $ 64 (1) (2) Includes allocated general and administrative expenses in our Hotel segment of $20 million and $38 million; and in our Non-Hotel segment of $10 million and $19 million for the three and six months ended June 30, 2017, respectively. Includes allocated general and administrative expenses in our Hotel segment of $19 million and $41 million; and in our Non-Hotel segment of $9 million and $18 million for the three and six months ended June 30, 2016, respectively. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include TripAdvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has a variable interest in an affiliated entity in China in order to comply with Chinese laws and regulations, which restrict foreign investment in Internet content provision businesses. Although we do not own the capital stock of this Chinese affiliate, we consolidate its results as we are the primary beneficiary of the cash losses or profits of this variable interest affiliate and have the power to direct the activity of this affiliate. Our variable interest entity is not material for all periods presented. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). In the opinion of management, all adjustments necessary for a fair presentation of the results of the interim period have been included. These adjustments consist of normal recurring items. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. We prepared the unaudited condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, we have condensed or omitted certain footnotes or other financial information that are normally required by GAAP for annual financial statements. Our interim unaudited condensed consolidated financial statements are not necessarily indicative of results that may be expected for any other interim period or for the full year. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2016, previously filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited consolidated financial statements as of that date, but does not include all disclosures including notes required by GAAP. |
Accounting Estimates | Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements include: (i) recognition and recoverability of goodwill, intangible and other long-lived assets; (ii) accounting for income taxes; and (iii) stock-based compensation. |
Seasonality | Seasonality Traveler expenditures in the global travel market tend to follow a seasonal pattern. As such, expenditures by travel advertisers to market to potential travelers and, therefore, our financial performance, or revenue and profits, tend to be seasonal as well. As a result, our financial performance tends to be seasonally highest in the second and third quarters of a year, as it is a key period for leisure travel research and trip-taking, which includes the seasonal peak in traveler hotel and vacation rental stays, and tours and attractions taken, compared to the first and fourth quarters which represent seasonal low points. Further significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. |
New Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Pronouncements | New Accounting Pronouncements Not Yet Adopted In May 2017, the Financial Accounting Standard Board (FASB) issued new accounting guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications which will reduce diversity in practice. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if the award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), the award’s vesting conditions, and the award’s classification as an equity or liability instrument are the same immediately before and after the change. The guidance also states that an entity is not required to estimate the value of the award immediately before and after the change if the change does not affect any of the inputs to the model used to value the award. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and will be applied prospectively to awards modified on or after the adoption date. Early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued or made available for issuance. We are currently evaluating our adoption date of this guidance. Upon adoption, we believe the new guidance will likely result in fewer changes to the terms of an award being accounted for as modifications. In March 2017, the FASB issued new accounting guidance which shortens the amortization period for the premium paid on certain purchased callable debt securities to the earliest call date instead of the bond’s maturity. The amendments do not require an accounting change for securities held at a discount; instead, the discount continues to be amortized to maturity. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We anticipate adopting this new guidance on January 1, 2019 and based on the composition of our current investment portfolio we do not expect it will have a material impact on our consolidated financial statements and related disclosures. In January 2017, the FASB issued new accounting guidance to clarify the definition of a business and provide additional guidance to assist entities with evaluating whether transactions should be accounted for as asset acquisitions (or asset disposals) or business combinations (or disposals of a business). Under this new guidance, an entity first determines whether substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this criterion is met, the transaction should be accounted for as an asset acquisition as opposed to a business combination. This distinction is important because the accounting for an asset acquisition significantly differs from the accounting for a business combination. This new guidance eliminates the requirement to evaluate whether a market participant could replace missing elements (e.g. inputs or processes), narrows the definition of outputs and requires that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. This new guidance will be effective for us in the first quarter of 2018, with early adoption permitted including for interim or annual periods in which the financial statements have not been issued or made available for issuance. The new guidance will be applied prospectively to any transactions occurring within the period of adoption. We are currently considering the timing of our adoption of this new guidance. Upon adoption, the new guidance will impact how we assess acquisitions (or disposals) of assets or businesses. In January 2017, the FASB issued new accounting guidance to simplify the accounting for goodwill impairment. The new guidance removes Step two of the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill, which requires a hypothetical purchase price allocation, with the carrying amount of that reporting unit’s goodwill. Under this new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The new guidance is effective for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests occurring after January 1, 2017. The new guidance will be applied prospectively. We are currently evaluating this guidance, including the date we will adopt this guidance and what the impact upon adoption will be, if any. In November 2016, the FASB issued new accounting guidance on the classification and presentation of restricted cash in the statement of cash flows to address the diversity in practice. This new guidance requires entities to show changes in cash, cash equivalents and restricted cash on a combined basis in the statement of cash flows. In addition, this accounting guidance requires a reconciliation of the total cash, cash equivalent and restricted cash in the statement of cash flows to the related captions in the balance sheet if cash, cash equivalents and restricted cash are presented in more than one line item in the balance sheet. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, including adoption in an interim period, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. Upon adoption, an entity may apply the new guidance only retrospectively to all prior periods presented in the financial statements. We anticipate adopting this new guidance on January 1, 2018, on a retrospective basis, and do not expect it will have a material impact on our consolidated financial statements and related disclosures. In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity transfers of assets other than inventory. This accounting update, which is part of the FASB's simplification initiative, is intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual reporting period for which interim or annual financial statements have not been issued. Upon adoption, an entity may apply the new guidance only on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We expect to adopt this new guidance on January 1, 2018 and are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statements and related disclosures. In August 2016, the FASB issued new accounting guidance which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The new guidance specifically addresses the following cash flow topics in an effort to reduce diversity in practice: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon bonds; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Upon adoption, an entity may apply the new guidance only retrospectively to all prior periods presented in the financial statements. We anticipate adopting this new guidance on January 1, 2018, on a retrospective basis, and we do not expect it will have a material impact on our consolidated financial statements and related disclosures. In June 2016, the FASB issued new accounting guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities. For financial assets measured at amortized cost, this new guidance requires an entity to: (1) estimate its lifetime expected credit losses upon recognition of the financial assets and establish an allowance to present the net amount expected to be collected; (2) recognize this allowance and changes in the allowance during subsequent periods through net income; and (3) consider relevant information about past events, current conditions and reasonable and supportable forecasts in assessing the lifetime expected credit losses. For available-for-sale debt securities, this new guidance made several targeted amendments to the existing other-than-temporary impairment model, including: (1) requiring disclosure of the allowance for credit losses; (2) allowing reversals of the previously recognized credit losses until the entity has the intent to sell, is more-likely-than-not required to sell the securities or the maturity of the securities; (3) limiting impairment to the difference between the amortized cost basis and fair value; and (4) not allowing entities to consider the length of time that fair value has been less than amortized cost as a factor in evaluating whether a credit loss exists. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted, including interim periods within those fiscal years beginning after December 15, 2018. We are currently considering our timing of adoption and in the process of evaluating the impact of adopting this guidance on our consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets (right-of-use-assets) and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. The new guidance will classify leases as either finance or operating leases, with classification determining the presentation of expenses and cash flows on our consolidated financial statements. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. To date, we have made measurable progress toward evaluating the new lease guidance and have begun updating accounting policies, accounting position memos, and evaluating our existing population of contracts to ensure all contracts that meet the definition of a lease contract under the new standard upon adoption are identified. We are also in the process of implementing additional lease software to support our accounting process under the new lease accounting guidance, including the new quantitative and qualitative financial disclosures, and evaluating the impact of this new guidance and resulting system implementation on our internal controls. We will provide further updates as we continue to evaluate the impact that this new guidance will have, if any, on the Company’s consolidated financial statements and related disclosures In January 2016, the FASB issued a new accounting update which amends the guidance on the classification and measurement of financial instruments. Although the accounting update retains many current requirements, it significantly revises accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The accounting update also amends certain fair value disclosures of financial instruments and clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale debt securities in combination with the entity’s evaluation of their other deferred tax assets. The update requires entities to carry all investments in equity securities, including other ownership interests such as partnerships, unincorporated joint ventures and limited liability companies at fair value, with fair value changes recognized through net income. This requirement does not apply to investments that qualify for equity method accounting, investments that result in consolidation of the investee or investments in which the entity has elected the practicability exception to fair value measurement. Under current GAAP, available-for-sale investments in equity securities, with a readily determinable fair value, are re-measured to fair value each reporting period with changes in fair value recognized in accumulated other comprehensive income (loss). However, under the new guidance, fair value adjustments will be recognized through net income. For equity securities currently accounted for under the cost method (as they do not have a readily determinable fair value), the new guidance requires those equity investments to be carried at fair value with changes in net income, unless an entity elects to measure those investments, at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company intends to elect this measurement alternative for equity securities without a readily determinable fair value. Additionally, this accounting update will simplify the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. In addition, this accounting update eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is currently required to be disclosed for financial instruments measured at amortized cost in the balance sheet. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. Upon adoption, an entity will apply the new guidance on a modified retrospective basis, which is to record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted, with two exceptions. The amendments related to equity investments without readily determinable fair values (including disclosure requirements) will be effective prospectively. The requirement to use the exit price notion to measure the fair value of financial instruments for disclosure purposes will also be applied prospectively. We anticipate adopting this new guidance on January 1, 2018 and based on the composition of our current holdings, we do not expect the adoption of this guidance will have a material impact on our consolidated financial statements and related disclosures. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers which will replace numerous requirements in GAAP, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued additional guidance which clarifies principal versus agent considerations and, in April 2016, the FASB issued further guidance which clarifies the identification of performance obligations and the implementation guidance for licensing. The two permitted transition methods under this new accounting guidance are the full retrospective method, in which case the guidance would be applied to each prior reporting period presented and the cumulative effect of applying the guidance would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the guidance would be recognized at the date of initial application. We plan on adopting this new guidance on January 1, 2018 and we currently anticipate adopting the standard under the modified retrospective method, To date, we have made significant progress toward completing our evaluation of the potential changes from adopting the new standard on our future financial reporting and disclosures. We have established a cross-functional implementation team from across our organization and have made significant progress in the review of our contracts portfolio and our current accounting policies and practices to identify potential differences that could result from applying the requirements of the new standard to our revenue contracts. To date, we have evaluated the majority of our Hotel segment revenue and based on the Company's preliminary analysis; we currently do not expect a material impact to the timing or amount of our revenue recognition upon adoption of the new guidance. In addition, we do not expect any major reengineering required to our accounting systems or internal controls related to our Hotel segment. While we have made significant progress, we are still evaluating portions of our Hotel segment revenue and all of our non-Hotel revenue and the impact that this new guidance will have, if any, on the Company’s timing and/or amount of revenue recognition, including internal processes, systems, controls, and changes that may be required to support the new disclosure requirements upon adoption of this new guidance. We will continue to update our assessment of the effect that the new revenue guidance will have on our consolidated financial statements, disclosures and related controls, and will disclose any material effects, if any, when known. Recently Adopted Accounting Pronouncements In October 2016, the FASB issued new accounting guidance which amends the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity should treat indirect interests in the entity held through related parties that are under common control within the reporting entity when determining whether it is the primary beneficiary of that variable interest entity. We adopted this new guidance on January 1, 2017, on a retrospective basis, with no impact on our consolidated financial statements and related disclosures. There have been no material changes to our significant accounting policies since December 31, 2016. For additional information about our accounting policies and estimates, refer to “Note 2: Significant Accounting Policies”, in the notes to our consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2016. |
Stock Based Awards and Other 22
Stock Based Awards and Other Equity Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and Restricted Stock Units (RSUs) | The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and restricted stock units (“RSUs”), on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 (in millions) (in millions) Selling and marketing $ 6 $ 5 $ 11 $ 10 Technology and content 13 11 20 21 General and administrative 9 7 16 12 Total stock-based compensation 28 23 47 43 Income tax benefit from stock-based compensation (10 ) (8 ) (17 ) (15 ) Total stock-based compensation, net of tax effect $ 18 $ 15 $ 30 $ 28 |
Summary of Stock Option Activity | The following table presents a summary of our stock option activity during the six months ended June 30, 2017: Weighted Weighted Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life Value (in thousands) (in years) (in millions) Options outstanding at December 31, 2016 5,818 $ 57.60 Granted 1,502 42.88 Exercised (1) (404 ) 30.34 Cancelled or expired (383 ) 75.44 Options outstanding at June 30, 2017 6,533 $ 54.89 6.7 $ 6 Exercisable as of June 30, 2017 2,856 $ 47.75 4.6 $ 6 Vested and expected to vest after June 30, 2017 (2) 6,533 $ 54.89 6.7 $ 6 (1) Inclusive of 241,626 of options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares that had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants | The fair value of stock option grants under the 2011 Incentive Plan has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Risk free interest rate 1.87 % 1.08 % 1.91 % 1.20 % Expected term (in years) 5.32 4.31 5.35 4.84 Expected volatility 40.93 % 42.09 % 41.52 % 41.82 % Expected dividend yield — % — % — % — % |
Summary of RSU Activity | The following table presents a summary of our RSU activity during the six months ended June 30, 2017: Weighted Average Grant- Aggregate RSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested RSUs outstanding as of December 31, 2016 2,856 $ 69.35 Granted 4,002 42.88 Vested and released (1) (791 ) 67.73 Cancelled (332 ) 58.64 Unvested RSUs outstanding as of June 30, 2017 5,735 $ 51.72 $ 219 Expected to vest after June 30, 2017 (2) 5,735 $ 51.72 $ 219 (1) Inclusive of 231,022 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. (2) The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our expected to vest calculation unless necessary for a performance condition award. |
Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining | A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2017 related to our non-vested stock options and RSU awards is presented below: Stock Options RSUs Unrecognized compensation expense (in millions) $ 59 $ 258 Weighted average period remaining (in years) 2.6 3.2 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding | Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Numerator: Net income $ 27 $ 34 $ 40 $ 64 Denominator: Weighted average shares used to compute Basic EPS 140,472 145,732 142,052 145,588 Weighted average effect of dilutive securities: Stock options 228 1,060 372 1,123 RSUs 237 268 403 271 Weighted average shares used to compute Diluted EPS 140,937 147,060 142,827 146,982 Basic EPS $ 0.19 $ 0.23 $ 0.28 $ 0.44 Diluted EPS $ 0.19 $ 0.23 $ 0.28 $ 0.44 |
Common Shares Related to Stock Options and RSUs Excluded from Calculated Diluted EPS | The following potential common shares related to stock options and RSUs were excluded from the calculation of Diluted EPS (in thousands) because their effect would have been anti-dilutive for the periods presented: Three months ended June 30, Six months ended June 30, 2017(1) 2016(2) 2017(1) 2016(2) Stock options 4,801 3,055 4,617 2,963 RSUs 2,050 682 2,032 784 Total 6,851 3,737 6,649 3,747 (1) These totals do not include 125,000 performance-based options representing the right to acquire the equivalent number of shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. (2) These totals do not include 125,000 performance-based options and 12,799 performance based RSUs representing the right to acquire 137,799 shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments All Other Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Marketable Securities | The following tables show our cash and available-for-sale securities’ amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or short and long-term marketable securities as of the dates presented (in millions): June 30, 2017 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 885 $ - $ - $ 885 $ 885 $ - $ - Level 1: Money market funds 1 - - 1 1 - - Level 2: U.S. agency securities 3 - - 3 - 2 1 U.S. treasury securities 2 - - 2 - 2 - Certificates of deposit 1 - - 1 - 1 - Commercial paper 1 - - 1 1 - - Corporate debt securities 15 - - 15 - 12 3 Subtotal 22 - - 22 1 17 4 Total $ 908 $ - $ - $ 908 $ 887 $ 17 $ 4 December 31, 2016 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 595 $ - $ - $ 595 $ 595 $ - $ - Level 1: Money market funds 17 - - 17 17 - - Level 2: U.S. agency securities 23 - - 23 - 21 2 U.S. treasury securities 8 - - 8 - 8 - Certificates of deposit 16 - - 16 - 15 1 Commercial paper 5 - - 5 - 5 - Corporate debt securities 82 - - 82 - 69 13 Subtotal 134 - - 134 - 118 16 Total $ 746 $ - $ - $ 746 $ 612 $ 118 $ 16 |
Fair Value and Notional Principal Amounts of Outstanding or Unsettled Derivative Instruments | The following table shows the notional principal amounts of our outstanding derivative instruments that are not designated as hedging instruments as of the dates presented: June 30, 2017 December 31, 2016 (in millions) Foreign exchange-forward contracts (1), (2) $ 5 $ 6 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. Dollar. The Company was entered into one and two outstanding derivative contracts as of June 30, 2017 and December 31, 2016, respectively. (2) The fair value of our derivatives was not material as of June 30, 2017 and December 31, 2016, respectively. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | The Company’s outstanding debt consisted of the following as of the dates presented: June 30, December 31, 2017 2016 (in millions) Short-Term Debt: Chinese Credit Facilities $ 7 $ 7 2016 Credit Facility - 73 Total Short-Term Debt $ 7 $ 80 Long-Term Debt: 2015 Credit Facility $ 260 $ 91 Total Long-Term Debt $ 260 $ 91 |
Accrued Expenses and Other Cu26
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Details of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of the dates presented: June 30, 2017 December 31, 2016 (in millions) Accrued salary, bonus, and related benefits $ 42 $ 53 Accrued marketing costs 69 37 Other 54 37 Total $ 165 $ 127 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Three months ended June 30, 2017 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 326 $ 98 $ - $ 424 Adjusted EBITDA (1) 84 17 - 101 Depreciation (19 ) (19 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (28 ) (28 ) Operating income (loss) 46 Other expense, net (2 ) Income before income taxes 44 Provision for income taxes (17 ) Net income $ 27 Three months ended June 30, 2016 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 316 $ 75 $ - $ 391 Adjusted EBITDA (2) 105 (10 ) - 95 Depreciation (17 ) (17 ) Amortization of intangible assets (8 ) (8 ) Stock-based compensation (23 ) (23 ) Operating income (loss) 47 Other expense, net (3 ) Income before income taxes 44 Provision for income taxes (10 ) Net income $ 34 Six months ended June 30, 2017 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 640 $ 156 $ - $ 796 Adjusted EBITDA (1) 172 2 - 174 Depreciation (38 ) (38 ) Amortization of intangible assets (16 ) (16 ) Stock-based compensation (47 ) (47 ) Operating income (loss) 73 Other expense, net (4 ) Income before income taxes 69 Provision for income taxes (29 ) Net income $ 40 Six months ended June 30, 2016 Hotel Non-Hotel Corporate and Unallocated Total (in millions) Revenue $ 619 $ 124 $ - $ 743 Adjusted EBITDA (2) 211 (31 ) - 180 Depreciation (33 ) (33 ) Amortization of intangible assets (15 ) (15 ) Stock-based compensation (43 ) (43 ) Operating income (loss) 89 Other expense, net (6 ) Income before income taxes 83 Provision for income taxes (19 ) Net income $ 64 (1) (2) Includes allocated general and administrative expenses in our Hotel segment of $20 million and $38 million; and in our Non-Hotel segment of $10 million and $19 million for the three and six months ended June 30, 2017, respectively. Includes allocated general and administrative expenses in our Hotel segment of $19 million and $41 million; and in our Non-Hotel segment of $9 million and $18 million for the three and six months ended June 30, 2016, respectively. |
Business Description and Basi28
Business Description and Basis of Presentation - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017MarketLanguageBrandSegment | |
Accounting Policies [Abstract] | |
Number of markets with localized versions of website | Market | 48 |
Number of languages worldwide | Language | 28 |
Number of other media brands with websites | Brand | 20 |
Number of reportable segment | Segment | 2 |
Stock Based Awards and Other 29
Stock Based Awards and Other Equity Instruments - Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and Restricted Stock Units (RSUs) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 28 | $ 23 | $ 47 | $ 43 |
Income tax benefit from stock-based compensation | (10) | (8) | (17) | (15) |
Total stock-based compensation, net of tax effect | 18 | 15 | 30 | 28 |
Selling and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 6 | 5 | 11 | 10 |
Technology and Content | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 13 | 11 | 20 | 21 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 9 | $ 7 | $ 16 | $ 12 |
Stock Based Awards and Other 30
Stock Based Awards and Other Equity Instruments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 05, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Capitalized stock based compensation as internal-use software and website development costs | $ 3 | $ 3 | $ 6 | $ 6 | |
Cash received from stock option exercises | 3 | 3 | |||
Nonqualified stock option award grant date | Aug. 28, 2013 | ||||
Incremental fair value recognized to stock-based compensation expense | $ 5 | ||||
Remaining vesting term | Aug. 31, 2018 | ||||
Income tax benefits from exercise or settlement of stock-based awards | $ 1 | $ 3 | $ 15 | 16 | |
Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock options issued | 1,502,000 | ||||
RSU | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
RSU's issued under incentive plan | 4,002,000 | ||||
2011 Plan | Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of stock options issued | 1,502,240 | ||||
Term of stock options, granted | 10 years | ||||
Stock awards vest period | 4 years | ||||
Closing stock price | $ 38.20 | $ 38.20 | |||
Total intrinsic value | $ 6 | $ 19 | |||
Weighted-average grant date fair value of options granted | $ 16.56 | $ 20.42 | $ 17.19 | $ 22.85 | |
Total fair value of stock options vested | $ 15 | $ 25 | |||
Cash received from stock option exercises | $ 3 | $ 3 | |||
2011 Plan | RSU | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock awards vest period | 4 years | ||||
RSU's issued under incentive plan | 4,001,615 |
Stock Based Awards and Other 31
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2017USD ($)$ / sharesshares | ||
Options Outstanding | ||
Options Outstanding, Beginning balance | shares | 5,818 | |
Options Outstanding, Granted | shares | 1,502 | |
Options Outstanding, Exercised | shares | (404) | [1] |
Options Outstanding, Cancelled or expired | shares | (383) | |
Options Outstanding, Ending balance | shares | 6,533 | |
Options Outstanding, Exercisable | shares | 2,856 | |
Options Outstanding, Vested and expected to vest | shares | 6,533 | [2] |
Weighted Average Exercise Price per share | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 57.60 | |
Options Granted, Weighted Average Exercise Price | $ / shares | 42.88 | |
Options Exercised, Weighted Average Exercise Price | $ / shares | 30.34 | [1] |
Options Cancelled or expired, Weighted Average Exercise Price | $ / shares | 75.44 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | $ / shares | 54.89 | |
Options Exercisable, Weighted Average Exercise Price | $ / shares | 47.75 | |
Options Vested and expected to vest, Weighted Average Exercise Price | $ / shares | $ 54.89 | [2] |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 8 months 12 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 7 months 6 days | |
Options Vested and expected to vest, Weighted Average Remaining Contractual Life | 6 years 8 months 12 days | [2] |
Options Outstanding, Aggregate Intrinsic Value | $ | $ 6 | |
Options Exercisable, Aggregate Intrinsic Value | $ | 6 | |
Options Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 6 | [2] |
[1] | (1)Inclusive of 241,626 of options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares that had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. | |
[2] | (2)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award. |
Stock Based Awards and Other 32
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2017shares | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Options non converted into shares due to net share settlement | 241,626 |
Stock Based Awards and Other 33
Stock Based Awards and Other Equity Instruments - Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Risk free interest rate | 1.87% | 1.08% | 1.91% | 1.20% |
Expected term (in years) | 5 years 3 months 26 days | 4 years 3 months 22 days | 5 years 4 months 6 days | 4 years 10 months 3 days |
Expected volatility | 40.93% | 42.09% | 41.52% | 41.82% |
Stock Based Awards and Other 34
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2017USD ($)$ / sharesshares | ||
RSUs outstanding | ||
Unvested RSUs outstanding, Beginning balance | shares | 2,856 | |
Unvested RSUs, Granted | shares | 4,002 | |
Unvested RSUs, Vested and released | shares | (791) | [1] |
Unvested RSUs, Cancelled | shares | (332) | |
Unvested RSUs outstanding, Ending balance | shares | 5,735 | |
RSUs outstanding, Expected to vest | shares | 5,735 | [2] |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested RSUs outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 69.35 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 42.88 | |
Weighted Average Grant-Date Fair Value Per Share, Vested and released | $ / shares | 67.73 | [1] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 58.64 | |
Unvested RSUs outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | 51.72 | |
Weighted Average Grant-Date Fair Value Per Share, Expected to vest | $ / shares | $ 51.72 | [2] |
Aggregate Intrinsic Value | ||
Unvested RSUs outstanding, Aggregate Intrinsic Value | $ | $ 219 | |
RSUs Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 219 | [2] |
[1] | (1)Inclusive of 231,022 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. | |
[2] | (2)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our expected to vest calculation unless necessary for a performance condition award. |
Stock Based Awards and Other 35
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2017shares | |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs withheld to satisfy withholding tax requirements | 231,022 |
Stock Based Awards and Other 36
Stock Based Awards and Other Equity Instruments - Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense (in millions) | $ 59 |
Weighted average period remaining (in years) | 2 years 7 months 6 days |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period remaining (in years) | 3 years 2 months 12 days |
Unrecognized compensation expense, RSUs (in millions) | $ 258 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding In Calculating EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator: | ||||
Net income | $ 27 | $ 34 | $ 40 | $ 64 |
Denominator: | ||||
Weighted average shares used to compute Basic EPS | 140,472 | 145,732 | 142,052 | 145,588 |
Weighted average effect of dilutive securities: | ||||
Stock options | 228 | 1,060 | 372 | 1,123 |
RSUs | 237 | 268 | 403 | 271 |
Weighted average shares used to compute Diluted EPS | 140,937 | 147,060 | 142,827 | 146,982 |
Basic EPS | $ 0.19 | $ 0.23 | $ 0.28 | $ 0.44 |
Diluted EPS | $ 0.19 | $ 0.23 | $ 0.28 | $ 0.44 |
Earnings Per Share - Common Sha
Earnings Per Share - Common Shares Related to Stock Options and RSUs Excluded from Calculated Diluted EPS (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017 | [1] | Jun. 30, 2016 | [2] | Jun. 30, 2017 | [1] | Jun. 30, 2016 | [2] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 6,851 | 3,737 | 6,649 | 3,747 | ||||
Stock Options | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 4,801 | 3,055 | 4,617 | 2,963 | ||||
Restricted Stock Units | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,050 | 682 | 2,032 | 784 | ||||
[1] | These totals do not include 125,000 performance-based options representing the right to acquire the equivalent number of shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. | |||||||
[2] | These totals do not include 125,000 performance-based options and 12,799 performance based RSUs representing the right to acquire 137,799 shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. |
Earnings Per Share - Common S39
Earnings Per Share - Common Shares Related to Stock Options and RSUs Excluded from Calculated Diluted EPS (Parenthetical) (Details) - shares | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 6,851,000 | [1] | 3,737,000 | [2] | 6,649,000 | [1] | 3,747,000 | [2] |
Stock Options | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 4,801,000 | [1] | 3,055,000 | [2] | 4,617,000 | [1] | 2,963,000 | [2] |
Restricted Stock Units | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,050,000 | [1] | 682,000 | [2] | 2,032,000 | [1] | 784,000 | [2] |
Performance Shares | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 125,000 | 137,799 | 125,000 | 137,799 | ||||
Performance Shares | Stock Options | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 125,000 | 125,000 | 125,000 | 125,000 | ||||
Performance Shares | Restricted Stock Units | ||||||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | 12,799 | 12,799 | ||||||
[1] | These totals do not include 125,000 performance-based options representing the right to acquire the equivalent number of shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. | |||||||
[2] | These totals do not include 125,000 performance-based options and 12,799 performance based RSUs representing the right to acquire 137,799 shares of common stock for which all targets required to trigger vesting had not been achieved; therefore such awards were excluded from the calculation of weighted average shares used to compute Diluted EPS for those reporting periods. |
Financial Instruments - Schedul
Financial Instruments - Schedule of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | $ 887 | $ 612 |
Short-Term Marketable Securities | 17 | 118 |
Long-Term Marketable Securities | 4 | 16 |
Cash | 885 | 595 |
Cash, cash equivalents and marketable securities, Amortized Cost | 908 | 746 |
Cash, cash equivalents and marketable securities, Fair Value | 908 | 746 |
Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash equivalents | 1 | 17 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 22 | 134 |
Fair Value | 22 | 134 |
Cash and Cash Equivalents | 1 | |
Short-Term Marketable Securities | 17 | 118 |
Long-Term Marketable Securities | 4 | 16 |
Level 2 | U.S. Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 3 | 23 |
Fair Value | 3 | 23 |
Short-Term Marketable Securities | 2 | 21 |
Long-Term Marketable Securities | 1 | 2 |
Level 2 | US treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 2 | 8 |
Fair Value | 2 | 8 |
Short-Term Marketable Securities | 2 | 8 |
Level 2 | Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 1 | 16 |
Fair Value | 1 | 16 |
Short-Term Marketable Securities | 1 | 15 |
Long-Term Marketable Securities | 1 | |
Level 2 | Commercial Paper | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 1 | 5 |
Fair Value | 1 | 5 |
Cash and Cash Equivalents | 1 | |
Short-Term Marketable Securities | 5 | |
Level 2 | Corporate Debt Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 15 | 82 |
Fair Value | 15 | 82 |
Short-Term Marketable Securities | 12 | 69 |
Long-Term Marketable Securities | $ 3 | $ 13 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Investments Debt And Equity Securities [Abstract] | ||||
Financial instruments including money market funds maturities period | 90 days | 90 days | ||
Maximum maturities period of long-term marketable securities | 3 years | 3 years | ||
Minimum maturities period of long-term marketable securities | 1 year | 1 year | ||
Maximum remaining maturity for short-term marketable securities | 12 months | 12 months | ||
Minimum maturities of short-term marketable securities | 90 days | 90 days | ||
Net gain related to forward contracts | $ 2 | $ 1 | ||
Derivative instruments not designated as hedging instruments, description of terms | Our current forward contracts are not designated as hedges and have current maturities of less than 90 days | |||
Cost method investments | $ 14 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value and Notional Principal Amounts of Outstanding or Unsettled Derivative Instruments (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency exchange-forward contracts | [1],[2] | $ 5,000,000 | $ 6,000,000 |
[1] | Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. Dollar. The Company was entered into one and two outstanding derivative contracts as of June 30, 2017 and December 31, 2016, respectively. | ||
[2] | The fair value of our derivatives was not material as of June 30, 2017 and December 31, 2016, respectively. We measure the fair value of our outstanding or unsettled derivatives using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets |
Debt - Summary of Total Outstan
Debt - Summary of Total Outstanding Debt (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Short-Term Debt: | ||
Short-Term Debt | $ 7 | $ 80 |
Long-Term Debt: | ||
Long-Term Debt | 260 | 91 |
Chinese Credit Facilities | ||
Short-Term Debt: | ||
Credit Facilities | 7 | 7 |
2016 Credit Facility | ||
Short-Term Debt: | ||
Credit Facilities | 73 | |
2015 Credit Facility | ||
Long-Term Debt: | ||
Credit Facilities | $ 260 | $ 91 |
Debt - Two Thousand Fifteen Cre
Debt - Two Thousand Fifteen Credit Facility - Additional Information (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | May 12, 2017 | Jun. 30, 2015 | |
Debt Instrument [Line Items] | |||||||
Total interest expense and commitments fees | $ 4,000,000 | $ 3,000,000 | $ 7,000,000 | $ 6,000,000 | |||
2015 Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Total interest expense and commitments fees | 2,000,000 | $ 1,000,000 | $ 3,000,000 | $ 3,000,000 | |||
2015 Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity under Credit Facility | $ 1,200,000,000 | $ 1,000,000,000 | |||||
Interest rate description | Borrowings under the 2015 Credit Facility generally bear interest, at the Company’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBO rate for the interest period in effect for such borrowing; plus an applicable margin ranging from 1.25% to 2.00% (“Eurocurrency Spread”), based on the Company’s leverage ratio; or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum and (c) the Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%; in addition to an applicable margin ranging from 0.25% to 1.00% (“ABR Spread”), based on the Company’s leverage ratio. | ||||||
Credit facility, maturity date | Jun. 26, 2020 | ||||||
Credit facility, extended maturity date | May 12, 2022 | ||||||
Credit Facility, description | the 2015 Credit Facility was amended to, among other things, (i) increase the aggregate amount of revolving loan commitments available from $1.0 billion to $1.2 billion; and (ii) extend the maturity date of the 2015 Credit Facility from June 26, 2020 to May 12, 2022 (the “First Amendment”). | ||||||
Credit facility, expiration period | 5 years | ||||||
Line of credit facility additional borrowing | $ 375,000,000 | 375,000,000 | $ 375,000,000 | ||||
Repayments of Debt | $ 206,000,000 | ||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | ||||||
Deferred financing costs | 4,000,000 | $ 4,000,000 | $ 4,000,000 | ||||
Lender fees and debt financing costs capitalized | $ 2,000,000 | ||||||
2015 Credit Facility | Revolving Credit Facility | Adjusted London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate description | Adjusted LIBO Rate (or LIBO rate multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00% | ||||||
Borrowings, interest rate | 1.00% | 1.00% | 1.00% | ||||
2015 Credit Facility | Revolving Credit Facility | New York Fed Bank Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
Borrowings, interest rate description | effect on such day plus 1/2 of 1.00% per annum | ||||||
2015 Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate description | borrowings bear interest at LIBO rate; plus an applicable margin of 1.25% | ||||||
Borrowings, interest rate | 2.37% | 2.37% | 2.37% | ||||
2015 Credit Facility | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity under Credit Facility | $ 15,000,000 | $ 15,000,000 | $ 15,000,000 | ||||
Letters of credit outstanding amount | 3,000,000 | 3,000,000 | 3,000,000 | ||||
2015 Credit Facility | Borrowings On Same Day Notice | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity under Credit Facility | $ 40,000,000 | $ 40,000,000 | $ 40,000,000 | ||||
2015 Credit Facility | Minimum | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | ||||||
2015 Credit Facility | Minimum | Revolving Credit Facility | Eurocurrency Spread | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.25% | ||||||
2015 Credit Facility | Minimum | Revolving Credit Facility | Adjusted London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.25% | ||||||
2015 Credit Facility | Minimum | Revolving Credit Facility | ABR Spread | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.25% | ||||||
2015 Credit Facility | Minimum | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.25% | ||||||
2015 Credit Facility | Maximum | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.30% | ||||||
2015 Credit Facility | Maximum | Revolving Credit Facility | Eurocurrency Spread | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
2015 Credit Facility | Maximum | Revolving Credit Facility | Adjusted London Interbank Offered Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
2015 Credit Facility | Maximum | Revolving Credit Facility | ABR Spread | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.00% | ||||||
2015 Credit Facility | Maximum | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.00% |
Debt - Two Thousand Sixteen Cre
Debt - Two Thousand Sixteen Credit Facility - Additional Information (Details) - 2016 Credit Facility - Revolving Credit Facility - Lender - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Borrowing capacity under Credit Facility | $ 73,000,000 | |
Basis spread on variable rate | 1.50% | |
Credit Facility, description | The Company may borrow from the 2016 Credit Facility in U.S dollars only and we may voluntarily repay any outstanding borrowing at any time without premium or penalty. Any overdue amounts under or in respect of the 2016 Credit Facility not paid when due shall bear interest in the case of principal at the applicable interest rate plus 1.50% per annum. | |
Outstanding borrowings | $ 0 | |
Minimum | ||
Debt Instrument [Line Items] | ||
Repayment term of borrowings | 1 month | |
Maximum | ||
Debt Instrument [Line Items] | ||
Repayment term of borrowings | 6 months | |
London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.125% | |
Borrowings, interest rate description | bear interest at LIBOR plus 112.5 basis points |
Debt - Chinese Credit Facilitie
Debt - Chinese Credit Facilities - Additional Information (Details) - Chinese Credit Facilities | 6 Months Ended | ||
Jun. 30, 2017USD ($)CreditFacility | Jun. 30, 2017CNY (¥) | Dec. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 7,000,000 | $ 7,000,000 | |
Number of credit facilities | CreditFacility | 2 | ||
Chinese Credit Facility Boa | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 0 | ||
Borrowing capacity under Credit Facility | $ 30,000,000 | ||
Period of credit facility | 1 year | ||
Interest rate description | Borrowings under our Chinese Credit Facility—BOA generally bear interest at a rate based on People’s Bank of China benchmark, including certain adjustments which may be made in accordance with the market condition at the time of borrowing. | ||
Chinese Credit Facility JPM | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 7,000,000 | ||
Borrowing capacity under Credit Facility | $ 10,000,000 | ¥ 70,000,000 | |
Period of credit facility | 1 year | ||
Interest rate description | Borrowings under our Chinese Credit Facility—JPM generally bear interest at a rate based on People’s Bank of China benchmark, including certain adjustments which may be made in accordance with the market condition at the time of borrowing. | ||
Line of credit, interest rate basis | 4.47% | 4.47% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Taxes [Line Items] | |||||
Effective tax rate | 38.60% | 22.70% | 42.00% | 22.90% | |
Accrued interest | $ 7,000,000 | $ 7,000,000 | |||
Accrued penalties | 0 | 0 | |||
Tax benefit from subsidiary | $ 1,000,000 | $ 1,000,000 | $ 3,000,000 | $ 2,000,000 | |
Minimum | Expedia | IRS | Tax Years 2009 and 2010 | |||||
Income Taxes [Line Items] | |||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | $ 10,000,000 | ||||
Maximum | Expedia | IRS | Tax Years 2009 and 2010 | |||||
Income Taxes [Line Items] | |||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | $ 14,000,000 |
Accrued Expenses and Other Cu48
Accrued Expenses and Other Current Liabilities - Details of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued salary, bonus, and related benefits | $ 42 | $ 53 |
Accrued marketing costs | 69 | 37 |
Other | 54 | 37 |
Total | $ 165 | $ 127 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jan. 25, 2017 | |
Equity [Abstract] | ||
Authorized the repurchase of shares of common stock | $ 250,000,000 | |
Repurchase of common stock, shares | 6,079,003 | |
Aggregate cost of shares repurchased, common stock | $ 250,000,000 | |
Average price of shares repurchased, common stock | $ 41.13 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - LTRIP - USD ($) shares in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | ||
Beneficially ownership of shares of common stock | 18.2 | |
Percentage taken from outstanding shares of common stock | 14.40% | |
Percentage of beneficially ownership of shares of common stock class B | 22.30% | |
Right to voting | one vote per share | |
Beneficially ownership of equity securities | 57.60% | |
Related party transactions | $ 0 | $ 0 |
Class B Common Stock | ||
Related Party Transaction [Line Items] | ||
Beneficially ownership of shares of common stock | 12.8 | |
Percentage taken from outstanding shares of common stock | 100.00% | |
Right to voting | Ten votes per share |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segment | 2 |
Non-Hotel Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | $ 424 | $ 391 | $ 796 | $ 743 | ||||
Adjusted EBITDA | 101 | [1] | 95 | [2] | 174 | [1] | 180 | [2] |
Depreciation | (19) | (17) | (38) | (33) | ||||
Amortization of intangible assets | (8) | (8) | (16) | (15) | ||||
Stock-based compensation | (28) | (23) | (47) | (43) | ||||
Operating income | 46 | 47 | 73 | 89 | ||||
Other expense, net | (2) | (3) | (4) | (6) | ||||
Income before income taxes | 44 | 44 | 69 | 83 | ||||
Provision for income taxes | (17) | (10) | (29) | (19) | ||||
Net income | 27 | 34 | 40 | 64 | ||||
Operating Segments | Non-Hotel Segment | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | 98 | 75 | 156 | 124 | ||||
Adjusted EBITDA | 17 | [1] | (10) | [2] | 2 | [1] | (31) | [2] |
Operating Segments | Hotel Segment | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenue | 326 | 316 | 640 | 619 | ||||
Adjusted EBITDA | 84 | [1] | 105 | [2] | 172 | [1] | 211 | [2] |
Corporate and Unallocated | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Depreciation | (19) | (17) | (38) | (33) | ||||
Amortization of intangible assets | (8) | (8) | (16) | (15) | ||||
Stock-based compensation | $ (28) | $ (23) | $ (47) | $ (43) | ||||
[1] | Includes allocated general and administrative expenses in our Hotel segment of $20 million and $38 million; and in our Non-Hotel segment of $10 million and $19 million for the three and six months ended June 30, 2017, respectively. | |||||||
[2] | Includes allocated general and administrative expenses in our Hotel segment of $19 million and $41 million; and in our Non-Hotel segment of $9 million and $18 million for the three and six months ended June 30, 2016, respectively. |
Segment Information - Summary53
Segment Information - Summary of Segment Information (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
General and administrative | [1] | $ 38 | $ 34 | $ 73 | $ 72 |
Operating Segments | Hotel Segment | |||||
Segment Reporting Information [Line Items] | |||||
General and administrative | 20 | 19 | 38 | 41 | |
Operating Segments | Non-Hotel Segment | |||||
Segment Reporting Information [Line Items] | |||||
General and administrative | $ 10 | $ 9 | $ 19 | $ 18 | |
[1] | Includes stock-based compensation expense as follows: |