Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 09, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | TripAdvisor, Inc. | ||
Trading Symbol | TRIP | ||
Entity Central Index Key | 1,526,520 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 4,096,061,843 | ||
Common Stock, Unclassified | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 126,183,939 | ||
Class B Common Stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,799,999 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Income Statement [Abstract] | |||||
Revenue | $ 1,556 | $ 1,480 | $ 1,492 | ||
Costs and expenses: | |||||
Cost of revenue | [1] | 72 | 71 | 58 | |
Selling and marketing | [2] | 849 | 756 | 692 | |
Technology and content | [2] | 243 | 243 | 207 | |
General and administrative | [2] | 157 | 143 | 210 | |
Depreciation | 79 | 69 | 57 | ||
Amortization of intangible assets | 32 | 32 | 36 | ||
Total costs and expenses | 1,432 | 1,314 | 1,260 | ||
Operating income | 124 | 166 | 232 | ||
Other income (expense): | |||||
Interest expense | (15) | (12) | (10) | ||
Interest income and other, net | 1 | (3) | 17 | ||
Total other income (expense), net | (14) | (15) | 7 | ||
Income before income taxes | 110 | 151 | 239 | ||
Provision for income taxes | (129) | [3] | (31) | (41) | |
Net income (loss) | $ (19) | $ 120 | $ 198 | ||
Earnings (loss) per share attributable to common stockholders (Note 5): | |||||
Basic | $ (0.14) | $ 0.83 | $ 1.38 | ||
Diluted | $ (0.14) | $ 0.82 | $ 1.36 | ||
Weighted average common shares outstanding (Note 5): | |||||
Basic | 140,445 | 145,443 | 143,836 | ||
Diluted | 140,445 | 146,893 | 145,967 | ||
[1] | Excludes amortization expense as follows: | ||||
[2] | Includes stock-based compensation expense as follows: | ||||
[3] | The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. |
Consolidated Statements of Ope3
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Costs and expenses: | |||
Amortization of intangible assets | $ 32 | $ 32 | $ 36 |
Depreciation | 79 | 69 | 57 |
Amortization adjustment | 62 | 53 | 46 |
Stock-based compensation: | |||
Stock-based compensation | 96 | 85 | 72 |
Selling and Marketing | |||
Stock-based compensation: | |||
Stock-based compensation | 21 | 20 | 16 |
Technology and Content | |||
Stock-based compensation: | |||
Stock-based compensation | 40 | 40 | 28 |
General and Administrative | |||
Stock-based compensation: | |||
Stock-based compensation | 35 | 25 | 28 |
Acquired Technology | |||
Costs and expenses: | |||
Amortization of intangible assets | 8 | 7 | 9 |
Website Development Costs | |||
Costs and expenses: | |||
Depreciation | $ 54 | $ 46 | $ 37 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (19) | $ 120 | $ 198 | |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | [1] | 35 | (14) | (33) |
Reclassification adjustment on sale of business included in total other income (expense), net (Note 3) | 1 | |||
Total other comprehensive income (loss) | 35 | (14) | (32) | |
Comprehensive income | $ 16 | $ 106 | $ 166 | |
[1] | Foreign currency translation adjustments exclude income taxes due to our intention to indefinitely reinvest the earnings of our foreign subsidiaries in those operations. Refer to “Note 15 — Stockholders’ Equity”. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents (Note 6) | $ 673 | $ 612 | |
Short-term marketable securities (Note 6) | 35 | 118 | |
Accounts receivable, net of allowance for doubtful accounts of $16 and $9, respectively (Note 2) | 230 | 189 | |
Income taxes receivable (Note 10) | 30 | ||
Prepaid expenses and other current assets | 25 | 31 | |
Total current assets | 993 | 950 | |
Long-term marketable securities (Note 6) | 27 | 16 | |
Property and equipment, net (Note 7) | 263 | 260 | |
Intangible assets, net (Note 8) | 142 | 167 | |
Goodwill (Note 8) | 758 | 736 | |
Deferred income taxes, net (Note 10) | 16 | 42 | |
Other long-term assets | 73 | 67 | |
TOTAL ASSETS | 2,272 | 2,238 | |
Current liabilities: | |||
Accounts payable | 8 | 14 | |
Deferred merchant payables (Note 2) | 156 | 128 | |
Deferred revenue | 60 | 64 | |
Current portion of debt (Note 9) | [1] | 7 | 80 |
Income taxes payable (Note 10) | 5 | 10 | |
Accrued expenses and other current liabilities (Note 11) | 136 | 127 | |
Total current liabilities | 372 | 423 | |
Long-term debt (Note 9) | 230 | 91 | |
Deferred income taxes, net (Note 10) | 14 | 12 | |
Other long-term liabilities (Note 12) | 293 | 210 | |
Total Liabilities | 909 | 736 | |
Commitments and contingencies (Note 13) | |||
Stockholders’ equity: (Note 15) | |||
Preferred stock, $0.001 par value Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 | |||
Additional paid-in capital | 926 | 831 | |
Retained earnings | 926 | 945 | |
Accumulated other comprehensive (loss) income | (42) | (77) | |
Treasury stock-common stock, at cost, 9,474,490 and 3,395,487 shares, respectively | (447) | (197) | |
Total Stockholders’ Equity | 1,363 | 1,502 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,272 | $ 2,238 | |
[1] | The weighted-average interest rate on short-term debt was 5.0% as of December 31, 2017 and 2.1% as of December 31, 2016. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 16 | $ 9 |
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 | 135,617,263 | 134,706,467 |
Common stock, shares outstanding | 126,142,773 | 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 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Class B Common Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock |
Beginning balance at Dec. 31, 2014 | $ 1,125 | $ 673 | $ 628 | $ (31) | $ (145) | ||
Beginning balance, shares at Dec. 31, 2014 | 12,799,999 | 132,315,465 | (2,194,173) | ||||
Net income (loss) | 198 | 198 | |||||
Other comprehensive (loss) income | (32) | (32) | |||||
Issuance of common stock related to exercise of options and vesting of RSUs | $ 12 | 12 | |||||
Issuance of common stock related to exercise of options and vesting of RSUs, shares | 1,520,777 | ||||||
Repurchase of common stock, shares (Note 15) | 0 | ||||||
Issuance of treasury stock as charitable contribution (Note 15) | $ 67 | 14 | $ 53 | ||||
Issuance of treasury stock as charitable contribution, Shares (Note 15) | 801,042 | ||||||
Tax benefits on equity awards, net | 35 | 35 | |||||
Withholding taxes on net share settlements of equity awards | (73) | (73) | |||||
Stock-based compensation | 80 | 80 | |||||
Ending balance at Dec. 31, 2015 | 1,412 | 741 | 826 | (63) | $ (92) | ||
Ending balance, shares at Dec. 31, 2015 | 12,799,999 | 133,836,242 | (1,393,131) | ||||
Net income (loss) | 120 | 120 | |||||
Cumulative effect adjustment from adoption of new accounting guidance related to stock-based compensation | (1) | (1) | |||||
Other comprehensive (loss) income | (14) | (14) | |||||
Issuance of common stock related to exercise of options and vesting of RSUs | 7 | 7 | |||||
Issuance of common stock related to exercise of options and vesting of RSUs, shares | 870,225 | ||||||
Repurchase of common stock (Note 15) | $ (105) | $ (105) | |||||
Repurchase of common stock, shares (Note 15) | (2,002,356) | (2,002,356) | |||||
Withholding taxes on net share settlements of equity awards | $ (15) | (15) | |||||
Stock-based compensation | 98 | 98 | |||||
Ending balance at Dec. 31, 2016 | $ 1,502 | 831 | 945 | (77) | $ (197) | ||
Ending balance, shares at Dec. 31, 2016 | 131,310,980 | 12,799,999 | 134,706,467 | (3,395,487) | |||
Net income (loss) | $ (19) | (19) | |||||
Other comprehensive (loss) income | 35 | 35 | |||||
Issuance of common stock related to exercise of options and vesting of RSUs | 3 | 3 | |||||
Issuance of common stock related to exercise of options and vesting of RSUs, shares | 910,796 | ||||||
Repurchase of common stock (Note 15) | $ (250) | $ (250) | |||||
Repurchase of common stock, shares (Note 15) | (6,079,003) | (6,079,003) | |||||
Withholding taxes on net share settlements of equity awards | $ (17) | (17) | |||||
Stock-based compensation | 109 | 109 | |||||
Ending balance at Dec. 31, 2017 | $ 1,363 | $ 926 | $ 926 | $ (42) | $ (447) | ||
Ending balance, shares at Dec. 31, 2017 | 126,142,773 | 12,799,999 | 135,617,263 | (9,474,490) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Operating activities: | ||||
Net income (loss) | $ (19) | $ 120 | $ 198 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation of property and equipment, including amortization of internal-use software and website development | 79 | 69 | 57 | |
Amortization of intangible assets | 32 | 32 | 36 | |
Stock-based compensation expense (Note 4) | 96 | 85 | 72 | |
Non-cash contribution to charitable foundation (Note 17) | [1] | 67 | ||
Gain on sale of business (Note 3) | [2] | (20) | ||
Deferred tax expense (benefit) | 29 | (20) | (37) | |
Other, net | 10 | 10 | 9 | |
Changes in operating assets and liabilities, net of effects from acquisitions, other investments and dispositions: | ||||
Accounts receivable, prepaid expenses and other assets | (36) | (24) | (31) | |
Accounts payable, accrued expenses and other liabilities | 7 | 13 | ||
Deferred merchant payables | 14 | 21 | 15 | |
Income tax receivables/payables, net | 38 | 20 | 32 | |
Deferred revenue | (5) | 1 | 7 | |
Net cash provided by operating activities | 238 | 321 | 418 | |
Investing activities: | ||||
Capital expenditures, including internal-use software and website development | (64) | (72) | (109) | |
Acquisitions and other investments, net of cash acquired (Note 3) | (43) | (29) | ||
Proceeds from sale of business, net of cash sold (Note 3) | 25 | |||
Purchases of marketable securities | (63) | (166) | (205) | |
Sales of marketable securities | 105 | 84 | 187 | |
Maturities of marketable securities | 28 | 32 | 71 | |
Other investing activities, net | 2 | 2 | ||
Net cash provided by (used in) investing activities | 6 | (163) | (58) | |
Financing activities: | ||||
Repurchase of common stock (Note 15) | (250) | (105) | ||
Proceeds from exercise of stock options | 3 | 7 | 12 | |
Payment of withholding taxes on net share settlements of equity awards | (17) | (15) | (73) | |
Other financing activities, net | 12 | |||
Net cash used in financing activities | (200) | (143) | (189) | |
Effect of exchange rate changes on cash and cash equivalents | 17 | (17) | (12) | |
Net increase (decrease) in cash and cash equivalents | 61 | (2) | 159 | |
Cash and cash equivalents at beginning of period | 612 | 614 | 455 | |
Cash and cash equivalents at end of period | 673 | 612 | 614 | |
Supplemental disclosure of cash flow information: | ||||
Cash paid during the period for income taxes, net of refunds | 62 | 29 | 43 | |
Cash paid during the period for interest | 13 | 10 | 7 | |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Stock-based compensation capitalized with internal-use software and website development costs | 13 | 12 | 8 | |
Capitalization of construction in-process related to build to suit lease | 6 | |||
Chinese Credit Facilities | ||||
Financing activities: | ||||
Proceeds from credit facilities | 7 | 4 | ||
Payments to credit facility | (1) | (41) | ||
2011 Credit Facility | ||||
Financing activities: | ||||
Principal payments on credit facilities | (300) | |||
2015 Credit Facility | ||||
Financing activities: | ||||
Payments to credit facility | (296) | (210) | (90) | |
Proceeds from credit facility, net of financing costs | 433 | 101 | $ 287 | |
2016 Credit Facility | ||||
Financing activities: | ||||
Payments to credit facility | $ (73) | |||
Proceeds from credit facility, net of financing costs | $ 73 | |||
[1] | During the fourth quarter of 2015, we incurred an expense in the amount of $67 million to reflect a non-cash contribution to The TripAdvisor Charitable Foundation (the “Foundation”), which was recorded to general and administrative expense in our consolidated statement of operations. TripAdvisor had historically funded 2% of its annual operating income before amortization and stock-based compensation. TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount equal to eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under its pledge agreement in December 2015. We settled this obligation in treasury shares based on the fair value of our common stock on the date the treasury shares were issued to the Foundation and therefore given the use of stock to settle the obligation, the amount has been excluded from Adjusted EBITDA. TripAdvisor does not expect to make any future contributions to the Foundation. | |||
[2] | Refer to “Note 3 – Acquisitions and Dispositions” for information regarding our gain on sale of business in 2015. |
Organization and Business Descr
Organization and Business Description | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Business Description | NOTE 1: ORGANIZATION AND BUSINESS DESCRIPTION We refer to TripAdvisor, Inc. and our wholly-owned subsidiaries as “TripAdvisor,” “the Company,” “us,” “we” and “our” in these notes to the consolidated financial statements. On December 20, 2011 Expedia, Inc. completed a spin-off of TripAdvisor into a separate publicly traded Delaware corporation. We refer to this transaction as the “Spin-Off.” TripAdvisor’s common stock began trading on the NASDAQ as an independent public company on December 21, 2011 under the trading symbol “TRIP.” On December 11, 2012, Liberty Interactive Corporation, or Liberty, purchased an aggregate of approximately 4.8 million shares of common stock of TripAdvisor from Barry Diller, our former Chairman of the Board of Directors and Senior Executive, and certain of his affiliates. As a result, Liberty beneficially owned approximately 18.2 million shares of our common stock and 12.8 million shares of our Class B common stock. On August 27, 2014, the entire beneficial ownership of our common stock and Class B common stock held by Liberty was acquired by Liberty TripAdvisor Holdings, Inc., or LTRIP. Simultaneously, Liberty, LTRIP’s former parent company, distributed, by means of a dividend, to the holders of its Liberty Ventures common stock, Liberty’s entire equity interest in LTRIP. We refer to this transaction as the “Liberty Spin-Off”. As a result of the Liberty Spin-Off, effective August 27, 2014, LTRIP became a separate, publicly traded company holding 100% of Liberty’s interest in TripAdvisor. As a result of these transactions, as of December 31, 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 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 57.5% of our voting power. Description of Business TripAdvisor is an online travel company and our mission is to help people around the world to plan, book and experience the perfect trip. We seek to achieve our mission by providing users and travel partners a global platform about destinations, accommodations, activities and attractions, and restaurants that encompasses rich user-generated content, price comparison tools and online reservation and related services. TripAdvisor, Inc., by and through its subsidiaries, owns and operates a portfolio of leading online travel brands. Our flagship brand is TripAdvisor. TripAdvisor-branded websites include tripadvisor.com in the United States and localized versions of the website in 48 markets worldwide and 28 languages worldwide. TripAdvisor features approximately 600 million reviews and opinions on approximately 7.5 million places to stay, places to eat and things to do – including approximately 1.2 million hotels, inns, B&Bs and specialty lodging and 750,000 vacation rentals, 4.6 million restaurants and 915,000 activities and attractions worldwide. In addition to the flagship TripAdvisor brand, we manage and operate the following 20 other 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. Seasonality Traveler expenditures in the global travel market tend to follow a seasonal pattern. As such, expenditures by travel partners/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 | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying 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. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows. One of our subsidiaries that operates in China has variable interests in affiliated entities 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 these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. Our variable interest entities’ financials were not material for all periods presented. Accounting Estimates We use estimates and assumptions in the preparation of our 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 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 consolidated financial statements include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. Refer to “Note 10 - Income Taxes” Revenue Recognition We recognize revenue from our services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. Deferred revenue, which primarily relates to our subscription-based and commission based arrangements, is recorded when payments are received in advance of our performance as required by the underlying agreements. Click-based advertising and transaction revenue . Click-based revenue is derived primarily from click-through fees charged to our travel partners for traveler leads sent to the travel partners’ website. We record revenue from click-through fees in the same period as when the traveler makes the click-through to the travel partners’ website. Our instant booking transaction model revenue is comprised of commissions earned on all valid instant booking reservations. In a transaction model, our instant booking commission revenue is recorded at the time a traveler books a hotel transaction on our partner’s site where we, as facilitator for such booking, do not assume associated cancellation risk. Under the other instant booking model, called the consumption model, we assume cancellation risk associated with booking, and we record that revenue when the traveler’s stay at a hotel occurs. We have no post-booking service obligations for all instant booking transactions, regardless of the model chosen. Display-based and subscription-based advertising . We recognize display-based advertising revenue ratably over the advertising period or upon delivery of advertising impressions, depending on the terms of the advertising contract. Subscription-based advertising revenue is recognized ratably over the related contractual period over which service is delivered. Attractions . We work with local operators, or merchant partners, to provide travelers with access to tours and activities in popular destinations worldwide, earning a commission for such service. While the merchant of record, we receive cash from the consumer at the time of booking of the destination activity and record these amounts, net of commissions, as deferred merchant payables on our consolidated balance sheet. Commission revenue is recorded as deferred revenue at the time of booking and later recognized when the consumer has completed the destination activity. We pay the destination activity operators after the travelers’ use. In transactions where we are not the merchant of record, we invoice and receive commissions directly from our merchant partners and record commission revenue when the consumer has completed the destination activity. Restaurants. We recognize reservation revenues (or per seated diner fees) on a transaction-by-transaction basis as diners are seated by our restaurant customers. Subscription-based revenue is recognized ratably over the related contractual period over which the service is delivered. Vacation Rentals. We generate revenue from customers primarily on either a subscription basis over a fixed-term, or on a commission basis for transactions that are booked on our platform. Payments for term-based subscriptions, related to online advertising services for the listing of vacation rental properties for rent, received in advance of services being rendered are recorded as deferred revenue and recognized ratably to revenue on a straight-line basis over the listing period. Our commission revenue is primarily generated on our free-to-list option, in lieu of a pre-paid subscription fee. When a commissionable transaction is booked on our platform, we act as the merchant of record and receive cash from the traveler that includes both our commission, which is recorded as deferred revenue, and the amount due to the property owner, which is recorded to deferred merchant payables on our consolidated balance sheet. We pay the amount due to the property owner and recognize our commission revenue at the time of the traveler’s stay. Additional revenues are also derived on a pay-per-lead basis, as we provide leads for rental properties to property managers. Pay-per-lead revenue is billed and recognized in the period when the leads are delivered to the property managers. Cost of Revenue Cost of revenue consists of expenses that are directly related or closely correlated to revenue generation, including direct costs, such as ad serving fees, flight search fees, credit card fees and other transaction costs, and data center costs. In addition, cost of revenue includes personnel and overhead expenses, including salaries, benefits, stock-based compensation expense and bonuses for certain customer support personnel who are directly involved in revenue generation. Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including traffic generation costs from SEM and other online traffic acquisition costs, syndication costs and affiliate program commissions, social media costs, brand advertising, television and other offline advertising, promotions and public relations. In addition, our sales and marketing expenses consist of indirect costs such as personnel and overhead expenses, including salaries, commissions, benefits, stock-based compensation expense and bonuses for sales, sales support, customer support and marketing employees. We incur advertising expense, which includes traffic generation costs from SEM and other online traffic costs, affiliate program commissions, display advertising, social media, and other online, and offline (including television) advertising expense, promotions and public relations to promote our brands. We expense the costs associated with communicating the advertisements in the period in which the advertisement takes place. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. For the years ended December 31, 2017, 2016 and 2015, we recorded advertising expense of $629 million, $543 million, and $507 million, respectively, in selling and marketing expense on our consolidated statements of operations. As of both December 31, 2017 and 2016, we had $5 million of prepaid marketing expenses included in prepaid expenses and other current assets on our consolidated balance sheets. We expect to fully expense our prepaid marketing asset of $5 million as of December 31, 2017 to the consolidated statement of operations during 2018. Technology and Content Technology and content expenses consist primarily of personnel and overhead expenses, including salaries and benefits, stock-based compensation expense and bonuses for salaried employees and contractors engaged in the design, development, testing, content support, and maintenance of our websites and mobile apps. Other costs include licensing, maintenance expense, computer supplies, telecom costs, content translation costs, and consulting costs. General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in executive leadership, finance, legal, and human resources, as well as stock-based compensation expense for those same personnel. General and administrative costs also include professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense, non-income taxes, such as sales, use and other non-income related taxes, and charitable contributions. Stock-Based Compensation Stock Options. The exercise price for all stock options granted by us to date has been equal to the market price of the underlying shares of common stock at the date of grant. In this regard, when making stock option awards, our practice is to determine the applicable grant date and to specify that the exercise price shall be the closing price of our common stock on the date of grant. Our stock options generally have a term of ten years from the date of grant and typically vest equally over a four-year requisite service period. We amortize the grant-date fair value of our stock option grants as stock-based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. The estimated grant-date fair value of stock options is calculated using a Black-Scholes Merton option-pricing model (“Black-Scholes model”). The Black-Scholes model incorporates assumptions to fair value stock-based awards, which includes the risk-free rate of return, expected volatility, expected term and expected dividend yield. Our risk-free interest rate is based on the rates currently available on zero-coupon U.S. Treasury issues, in effect at the time of the grant, whose remaining maturity period most closely approximates the stock option’s expected term assumption. Our expected volatility is calculated by equally weighting the historical volatility and implied volatility on our own common stock. Historical volatility is determined using actual daily price observations of our common stock price over a period equivalent to or approximate to the expected term of our stock option grants to date. Implied volatility represents the volatility calculated from the observed prices of our actively traded options on our common stock, with remaining maturities in excess of six months and market prices approximate to the exercise prices of the stock option grant. We estimate our expected term using historical exercise behavior and expected post-vest termination data. Our expected dividend yield is zero, as we have not paid any dividends on our common stock to date and do not expect to pay any cash dividends for the foreseeable future. Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of our common stock as the award vests. RSUs are measured at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value of RSUs as stock-based compensation expense over the vesting term, which is typically four years on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. Performance-Based Awards. Performance-based stock options and RSUs vest upon achievement of certain company-based performance conditions and a requisite service period. On the date of grant, the fair value of a performance-based award is calculated using the same method as our service based stock options and RSUs described above. We then assess whether it is probable that the individual performance targets would be achieved. If assessed as probable, compensation expense will be recorded for these awards over the estimated performance period. At each reporting period, we will reassess the probability of achieving the performance targets and the performance period required to meet those targets. The estimation of whether the performance targets will be achieved and of the performance period required to achieve the targets requires judgment, and to the extent actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized. The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets. Market-based performance RSUs, or market-based RSUs, vest upon achievement of specified levels of market conditions. The fair value of our market-based RSUs is estimated at the date of grant using a Monte-Carlo simulation model. The probabilities of the actual number of market-based performance units expected to vest and resultant actual number of shares of common stock expected to be awarded are reflected in the grant date fair values; therefore, the compensation expense for these awards will be recognized assuming the requisite service period is rendered and are not adjusted based on the actual number of awards that ultimately vest. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value. The Company accounts for forfeitures in the period in which they occur, rather than estimate expected forfeitures. Income Taxes We record income taxes under the asset and liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. We classify deferred tax assets and liabilities as noncurrent on our consolidated balance sheet. We record liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination. Cash and Cash Equivalents Our cash consists of cash deposits held in global financial institutions. Our cash equivalents consist of highly liquid investments, including money market funds, with maturities of 90 days or less at the date of purchase. Short-term and Long-term Marketable Securities We classify our marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited by policy to money market funds and mutual funds, as either a cash equivalent, short-term or long-term based on the nature of each security and its availability for use in current operations. As of December 31, 2017, our marketable securities have been classified and accounted for as available-for-sale, and therefore are carried at fair value, with the unrealized gains and losses, net of taxes, reported in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Fair values are determined for each individual security in the investment portfolio. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate the designations at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Realized gains and losses on the sale of marketable securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration, liquidity, and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years, according to our investment policy. We continually review our available for sale securities to determine whether a decline in fair value below the carrying value is other than temporary. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, and our intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s cost basis. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If we do not intend to sell the security, but it is probable that we will not collect all amounts due, then only the impairment due to the credit risk would be recognized in earnings and the remaining amount of the impairment would be recognized in accumulated other comprehensive loss within stockholders’ equity. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally due within 30 days and are recorded net of an allowance for doubtful accounts. We record accounts receivable at the invoiced amount. Collateral is not required for accounts receivable. For accounts outstanding longer than the contractual payment terms, we determine an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. The following table presents the changes in our allowance for doubtful accounts for the periods presented: December 31, 2017 2016 2015 (in millions) Allowance for doubtful accounts: Balance, beginning of period $ 9 $ 6 $ 7 Charges (recoveries) to earnings 8 4 3 Write-offs, net of recoveries and other adjustments (1 ) (1 ) (4 ) Balance, end of period $ 16 $ 9 $ 6 Derivative Financial Instruments Our goal in managing our foreign currency exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. We do not use derivatives for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value. In certain circumstances, we enter into foreign currency forward exchange contracts (“forward contracts”) to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. Our derivative instruments, or forward contracts, that the Company has entered into to date have not been designated as hedges. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through current income. Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in interest income and other, net on our consolidated statements of operations. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not expected to be significant due to the short-term nature of the contracts, which to date, have had maturities at inception of 90 days or less. The net cash received or paid related to our derivative instruments are classified in other investing activities in our consolidated statements of cash flow. We had not entered into any cash flow, fair value or net investment hedges as of December 31, 2017. Property and Equipment, Including Website and Software Development Costs We record property and equipment at cost, net of accumulated depreciation. We capitalize certain costs incurred during the application development stage related to the development of websites and internal use software when it is probable the project will be completed and the software will be used as intended. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. We expense costs related to the planning and post-implementation phases of software and website development as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment, capitalized software and website development, office furniture and other equipment. We depreciate leasehold improvements using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease. Leases We lease office space in many countries around the world under non-cancelable lease agreements. We generally lease our office facilities under operating lease agreements. Office facilities subject to an operating lease and the related lease payments are not recorded on our balance sheet. The terms of certain lease agreements provide for rental payments on a graduated basis, however, we recognize rent expense on a straight-line basis over the lease period in accordance with GAAP. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance under GAAP. If we continue to be the deemed owner, for accounting purposes, the facilities are accounted for as financing obligations. We also establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition for asset retirement obligations. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other long-term liabilities on our consolidated balance sheet. Our asset retirement obligations were not material as of December 31, 2017 and December 31, 2016, respectively. Business Combinations We account for acquired businesses using the acquisition method of accounting which requires that the tangible assets and identifiable intangible assets acquired and assumed liabilities be recorded at the date of acquisition at their respective fair values. Any excess purchase price over the estimated fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer and supplier relationships, acquired technology and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Valuations are performed by management or third party valuation specialists under management's supervision, where appropriate. Any changes to provisional amounts identified during the measurement period, calculated as if the accounting had been completed as of the acquisition date, are recognized in the consolidated statement of operations in the reporting period in which the adjustment amounts are determined. Goodwill and Intangible Assets Goodwill We assess goodwill, which is not amortized, for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill. The Company has the option to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In the evaluation of goodwill for impairment, we generally first perform a qualitative assessment to determine whether it is more likely than not (i.e., a likelihood of more than 50%) that the estimated fair value of the reporting unit is less than the carrying amount. Periodically, we may choose to forgo the initial qualitative assessment and proceed directly to a quantitative analysis to assist in our annual evaluation. When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, such as the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, and the amount of time in between quantitative fair value assessments and the date of acquisition to establish an updated baseline quantitative analysis. During a qualitative assessment, if we determine that it is not more likely than not that the implied fair value of the goodwill is less than its carrying amount, no further testing is necessary. If, however, we determine that it is more likely than not that the implied fair value of the goodwill is less than its carrying amount, we then perform a quantitative assessment and compare the estimated fair value of the reporting unit to the carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, the goodwill impairment is measured using the difference between the carrying value and the fair value of the reporting unit, however, any loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. In determining the estimated fair values of reporting units in a quantitative goodwill impairment test, we generally use a blend, of the following recognized valuation methods: the income approach (discounted cash flows model) and the market valuation approach, which we believe compensates for the inherent risks of using either model on a stand-alone basis. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: weighted average cost of capital; long-term rate of growth and profitability of the reporting unit; income tax rates and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison to comparable publicly traded firms in similar lines of business and other precedent transactions. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units. Valuations are performed by management or third party valuation specialists under management's supervision, where appropriate. We believe that the estimated fair values assigned to our reporting units in impairment tests are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inheren |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | NOTE 3: ACQUISITIONS AND DISPOSITIONS During the years ended December 31, 2016 and 2015, we acquired a number of businesses in which business combinations were accounted for as purchases of businesses under the acquisition method. The fair value of purchase consideration has been allocated to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values on the acquisition date, with the remaining amount recorded to goodwill. Acquired goodwill represents the premium we paid over the fair value of the net tangible and intangible assets acquired. We paid a premium in each of these transactions for a number of reasons, including expected operational synergies, the assembled workforces, and the future development initiatives of the assembled workforces. The results of each of these acquired businesses have been included in the consolidated financial statements beginning on the respective acquisition dates. Pro-forma results of operations for these acquisitions have not been presented as the financial impact to our consolidated financial statements, both individually and in aggregate, would not be materially different from historical results. For both the years ended December 31, 2016 and 2015, acquisition-related costs were expensed as incurred and were $1 million, respectively, which are included in general and administrative expenses on our consolidated statements of operations. 2016 Acquisitions of Businesses During the year ended December 31, 2016, we completed five acquisitions with a total purchase price of $34 million. The Company paid net cash consideration of $28 million, which is net of $4 million of cash acquired, and includes $2 million in future holdback payments, which we currently expect to settle with Company common stock over the next three years. The cash consideration was paid primarily from our U.S. cash. We acquired 100% of the outstanding capital stock of the following companies: Tous Au Restaurant, a leading restaurant event week brand in France, purchased in January 2016; HouseTrip, a European-based vacation rental website, purchased in April 2016; Citymaps, a social mapping platform, purchased in August 2016; Sneat, a provider of a mobile reservation platform for restaurants in France, purchased in October 2016; and Couverts, a provider of an online and mobile reservations platform for restaurants in the Netherlands, purchased in October 2016. The aggregate purchase price consideration of $34 million was allocated to the fair value of assets acquired and liabilities assumed. The following summarizes the final allocation, in millions: Total Goodwill (1) $ 17 Intangible assets (2) 25 Net tangible assets (liabilities) (3) (8 ) Total purchase price consideration (4) $ 34 (1) Goodwill is not deductible for tax purposes. (2) Identifiable definite-lived intangible assets acquired during 2016 were comprised of trade names of $4 million with a weighted average life of 10 years, customer lists and supplier relationships of $4 million with a weighted average life of 6 years, subscriber relationships of $5 million with a weighted average life of approximately 7 years, and technology and other of $12 million with a weighted average life of approximately 5 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2016 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. (3) Primarily includes cash acquired of $4 million, accounts receivable of $2 million, and liabilities assumed, including accrued expenses and deferred merchant payables of $3 million and $10 million, respectively, which reflect their respective fair values at acquisition. (4) Subject to adjustment based on indemnification obligations for general representations and warranties of certain acquired company stockholders. 2016 Other Investments During the year ended December 31, 2016, we also invested a total of $14 million in the equity securities of privately-held companies. The cash consideration was paid primarily from our non-U.S. subsidiaries. These investments were recorded to other long-term assets on our consolidated balance sheet on the acquisition date as cost method investments. 2015 Acquisitions of Businesses During the year ended December 31, 2015, we completed three acquisitions for a total purchase price consideration of $28 million and paid in cash. The cash consideration was paid primarily from our non-U.S. subsidiaries. We acquired 100% of the outstanding capital stock of the following companies: ZeTrip, a personal journal app that helps users log activities, including places they have visited and photos they have taken, purchased in January 2015; BestTables, a provider of an online and mobile reservations platform for restaurants in Portugal and Brazil, purchased in March 2015; and Dimmi, a provider of an online and mobile reservations platform for restaurants in Australia, purchased in May 2015. The aggregate purchase price consideration of $28 million was allocated to the fair value of assets acquired and liabilities. The following summarizes the final allocation, in millions: Total Goodwill (1) $ 17 Intangible assets (2) 12 Net tangible assets (liabilities) 1 Deferred tax liabilities, net (2 ) Total purchase price consideration $ 28 (1) Goodwill is not deductible for tax purposes. (2) Identifiable definite-lived intangible assets acquired during 2015 were comprised of trade names of $2 million with a weighted average life of approximately 10 years, customer lists and supplier relationships of $7 million with a weighted average life of approximately 6 years and technology and other of $3 million with a weighted average life of approximately 2 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2015 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. 2015 Sale of Business In August 2015, we sold 100% interest in one of our Chinese subsidiaries to an unrelated third party for $28 million in cash consideration. Accordingly, we deconsolidated $11 million of assets (which included $3 million of cash sold) and $4 million of liabilities from our consolidated balance sheet and recognized a $20 million gain on sale of subsidiary on our consolidated statement of operations in interest income and other, net during the year ended December 31, 2015. |
Stock Based Awards and Other Eq
Stock Based Awards and Other Equity Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Awards and Other Equity Instruments | NOTE 4: 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 RSUs, on our consolidated statements of operations during the periods presented: Year ended December 31, 2017 2016 2015 (in millions) Selling and marketing $ 21 $ 20 $ 16 Technology and content 40 40 28 General and administrative 35 25 28 Total stock-based compensation expense 96 85 72 Income tax benefit from stock-based compensation expense (28 ) (31 ) (26 ) Total stock-based compensation expense, net of tax effect $ 68 $ 54 $ 46 During the years ended December 31, 2017, 2016 and 2015, we capitalized $13 million, $12 million and $8 million, respectively, of stock-based compensation expense as internal-use software and website development costs. Stock and Incentive Plans On December 20, 2011, our 2011 Stock and Annual Incentive Plan became effective and we filed Post-Effective Amendment No. 1 on Form S-8 to Registration Statement on Form S-4 (File No. 333-178637) (the “Prior Registration Statement”) with the SEC, registering a total of 17,500,000 shares of our common stock, of which 17,400,000 shares were issuable in connection with grants of equity-based awards under our 2011 Incentive Plan (7,400,000 of which shares were originally registered on the Form S-4 and 10,000,000 of which shares were first registered on the Prior Registration Statement) and 100,000 shares were issuable under our Deferred Compensation Plan for Non-Employee Directors (refer to “Note 14— Employee Benefit Plans” Pursuant to the 2011 Incentive Plan, we may, among other things, grant RSUs, restricted stock, stock options and other stock-based awards to our directors, officers, employees and consultants. The summary of the material terms of the 2011 Incentive Plan is qualified in its entirety by the full text of the 2011 Incentive Plan previously filed. As of December 31, 2017, the total number of shares reserved for future stock-based awards under the 2011 Incentive Plan is approximately 9.4 million shares. All shares of common stock issued in respect of the exercise of options or other equity awards since Spin-Off have been issued from authorized, but unissued common stock. Stock Based Award Activity and Valuation 2017 Stock Option Activity During the year ended December 31, 2017, we have issued 2,333,361 of service-based non-qualified stock options from the 2011 Incentive Plan. These stock options generally have a term of ten years from the date of grant and typically vest equally over a four-year requisite service period. A summary of our stock option activity is presented below: 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) 2,333 40.03 Exercised (2) (496 ) 29.37 Cancelled or expired (802 ) 65.13 Options outstanding as of December 31, 2017 6,853 $ 52.78 6.5 $ 3 Exercisable as of December 31, 2017 3,340 $ 52.69 4.4 $ 3 Vested and expected to vest after December 31, 2017 (3) 6,853 $ 52.78 6.5 $ 3 (1) Inclusive of 780,000 stock options awarded to our Chief Executive Officer and President, or CEO, during November 2017. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $17.33. These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. (2) Inclusive of 294,410 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 which 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 consolidated statements of cash flows. (3) 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 NASDAQ as of December 31, 2017 was $34.46. The total intrinsic value of stock options exercised for the years ended December 31, 2017, 2016 and 2015 were $8 million, $24 million, and $149 million, 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: December 31, 2017 2016 2015 Risk free interest rate 2.02 % 1.20 % 1.58 % Expected term (in years) 6.13 4.85 5.42 Expected volatility 42.14 % 41.81 % 41.79 % Expected dividend yield — % — % — % The weighted-average grant date fair value of options granted was $16.50, $22.95, and $33.02 for the years ended December 31, 2017, 2016 and 2015, respectively. The total fair value of stock options vested for the years ended December 31, 2017, 2016 and 2015 were $40 million, $28 million, and $36 million, respectively. Cash received from stock option exercises for the years ended December 31, 2017, 2016 and 2015 were $3 million, $7 million, and $12 million, 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 CEO. 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 through August 2018. 2017 RSU Activity During the year ended December 31, 2017, we issued 5,042,160 RSUs under the 2011 Incentive Plan, which typically vest over a four-year requisite service period. A summary of our RSU activity, including service based awards and performance-based awards, is presented below: 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 (1)(2) 5,042 41.09 Vested and released (3) (1,030 ) 67.25 Cancelled (853 ) 52.64 Unvested RSUs outstanding as of December 31, 2017 6,015 $ 48.14 $ 207 Expected to vest after December 31, 2017 (4) 6,015 $ 48.14 $ 207 (1) Includes the following RSU grants awarded to our CEO, during November 2017: 1) 426,000 service-based RSUs; and 2) 213,000 market-based RSUs. The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $34.71. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of these awards, or $30.04 per RSU. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through December 31, 2020. Based upon actual attainment relative to the target performance metric, the CEO has the ability to receive up to 125% of the target number of market-based RSUs originally granted, or to be issued none at all. (2) Excludes a performance-based RSU grant for 213,000 shares awarded to our CEO during November 2017. This award provides for vesting based on the extent to which the Company achieves certain financial and/or the CEO achieves certain strategic performance metrics relative to the targets to be established by the Company’s Compensation Committee. One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. The estimated grant-date fair value per RSU will be calculated upon the establishment of annual performance targets and each tranche will be amortized on a straight-line basis over its requisite service period. At any point in time during the vesting period, the award’s expense to date will at least equal the portion of the grant-date fair value that is expected to vest at that date. Based upon actual attainment relative to the target performance metrics, the CEO has the ability to receive up to 125% of the target number originally granted, or to be issued none at all. (3) Inclusive of 301,932 RSUs withheld to satisfy required employee tax withholding requirements due to net share settlement. 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 consolidated statements of cash flows. (4 ) 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, respectively. Total current income tax benefits associated with the exercise or settlement of TripAdvisor stock-based awards held by our employees during the years ended December 31, 2017, 2016, and 2015 were $27 million, $21 million and $63 million, respectively. Unrecognized Stock-Based Compensation A summary of our remaining unrecognized compensation expense and the weighted average remaining amortization period at December 31, 2017 related to our non-vested stock options and RSU awards is presented below (in millions, except in years information): Stock Options RSUs Unrecognized compensation expense $ 52 $ 222 Weighted average period remaining (in years) 2.9 3.0 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 5: EARNINGS PER SHARE Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share, or 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, or 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 (loss) 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. In periods of a net loss, common equivalent shares are excluded from the calculation of Diluted EPS as their inclusion would have an antidilutive effect. Accordingly, for periods in which we report a net loss, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is anti-dilutive. 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: Year ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ (19 ) $ 120 $ 198 Denominator: Weighted average shares used to compute Basic EPS 140,445 145,443 143,836 Weighted average effect of dilutive securities: Stock options - 1,129 1,839 RSUs - 321 292 Weighted average shares used to compute Diluted EPS 140,445 146,893 145,967 Basic EPS $ (0.14 ) $ 0.83 $ 1.38 Diluted EPS $ (0.14 ) $ 0.82 $ 1.36 Potential common shares, consisting of outstanding stock options and RSUs, totaling approximately 12.5 million, 3.9 million, and 2.7 million, respectively, for the years ending December 31, 2017, 2016 and 2015, have been excluded from the calculations of Diluted EPS because their effect would have been antidilutive. In addition, potential common shares of approximately 0.6 million, 0.1 million, and 0.1 million, respectively, for the years ending December 31, 2017, 2016 and 2015, consisting of performance-based options and RSUs, for which all targets required to trigger vesting had not been achieved, 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 and Fair
Financial Instruments and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Investments All Other Investments [Abstract] | |
Financial Instruments and Fair Value Measurements | NOTE 6: FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS 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 fair value hierarchy and significant investment category recorded as cash and cash equivalents or short and long-term marketable securities as of the dates presented (in millions): December 31, 2017 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 663 $ — $ — $ 663 $ 663 $ — $ — Level 1: Money market funds 1 — — 1 1 — — Level 2: U.S. agency securities 11 — — 11 — 6 5 U.S. treasury securities 1 — — 1 — 1 — Certificates of deposit 2 — — 2 — 2 — Commercial paper 11 — — 11 9 2 — Corporate debt securities 46 — — 46 — 24 22 Subtotal 71 — — 71 9 35 27 Total $ 735 $ — $ — $ 735 $ 673 $ 35 $ 27 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 had 12 months or less remaining at December 31, 2017 and 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 years ended December 31, 2017, 2016, and 2015. There were also no material unrealized gains or losses related to our marketable securities held at December 31, 2017 and 2016. 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 December 31, 2017. Derivative Financial Instruments Our forward contracts, which we have entered into to date, have not been designated as hedges and have had maturities of less than 90 days. Consequently, any gain or loss resulting from the change in fair value has been recognized in our consolidated statement of operations. We recorded a net loss of $1 million for the year ended December 31, 2017, and a net gain of $2 million for both the years ended December 31, 2016 and 2015, respectively, related to our forward contracts in our consolidated statements of operations in interest income and other, net. The following table shows the notional principal amounts of our outstanding derivative instruments that are not designated as hedging instruments for the periods presented: December 31, 2017 December 31, 2016 (in millions) Foreign currency exchange-forward contracts (1)(2) $ — $ 6 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had no outstanding derivative contracts as of December 31, 2017 and two outstanding derivative contracts as of December 31, 2016. (2) The fair value of our outstanding derivatives as of December 31, 2016 was not material and was reported as an asset in prepaid expenses and other current assets on our consolidated balance sheet. 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 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 assets and liabilities not measured at fair value on a recurring basis, or carried at cost, 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 consolidated balance sheets as of December 31, 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 with a total carrying value of $12 million and $14 million at December 31, 2017 and 2016, respectively. These investments are accounted for under the cost method and included in other long-term assets on our consolidated balance sheet. Under cost method accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, certain distributions, and additional investments. The Company evaluates its investments at each reporting period or on a quarterly basis, to determine if any indicators of other-than-temporary impairment exist. Accordingly, we recognized a loss of $2 million related to the investment in one of these privately-held companies during the year ended December 31, 2017, which is included in interest income and other, net on our consolidated statement of operations. We did not have any losses or impairments related to our cost method investments during the year ended December 31, 2016. The Company did not have any recurring assets or liabilities measured at fair value that would be considered Level 3 at December 31, 2017 and December 31, 2016. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | NOTE 7: PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Capitalized software and website development $ 213 $ 153 Building (1) 123 123 Leasehold improvements 39 39 Computer equipment and purchased software 46 37 Furniture, office equipment and other 19 19 440 371 Less: accumulated depreciation (177 ) (111 ) Total $ 263 $ 260 (1) The Company is deemed for accounting purposes to be the owner of its corporate headquarters building under GAAP, and depreciates the asset over its estimated useful life of 40 years on a straight-line basis. Refer to “Note 13 – Commitments and Contingencies As of December 31, 2017 and December 31, 2016, the carrying value of our capitalized software and website development costs, net of accumulated amortization, were $97 million and $86 million, respectively. For the years ended December 31, 2017, 2016 and 2015, we capitalized $65 million, $62 million and $52 million, respectively, related to software and website development costs. For the years ended December 31, 2017, 2016 and 2015, we recorded amortization of capitalized software and website development costs of $54 million, $46 million and $37 million, respectively, which is included in depreciation expense on our consolidated statements of operations for those years. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | NOTE 8: GOODWILL AND INTANGIBLE ASSETS, NET The following table summarizes our goodwill activity by reportable segment for the periods presented: Hotel Non-Hotel Consolidated (in millions) Balance as of December 31, 2015 $ 442 $ 290 $ 732 Acquisitions (1) 10 7 17 Other adjustments (2) (1 ) (12 ) (13 ) Balance as of December 31, 2016 $ 451 $ 285 $ 736 Other adjustments (2) - 22 22 Balance as of December 31, 2017 $ 451 $ 307 $ 758 (1) The additions to goodwill relate to our business acquisitions. Refer to “Note 3— Acquisitions and Dispositions (2) Primarily related to impact of changes in foreign currency exchange rates to goodwill. Intangible assets, which were acquired in business combinations and recorded at fair value on the date of purchase, consist of the following for the periods presented: December 31, 2017 2016 (in millions) Intangible assets with definite lives $ 224 $ 217 Less: accumulated amortization (112 ) (80 ) Intangible assets with definite lives, net 112 137 Intangible assets with indefinite lives 30 30 Total $ 142 $ 167 Amortization expense was $32 million, $32 million, and $36 million, respectively, for the years ended December 31, 2017, 2016 and 2015. Our indefinite-lived intangible assets relate to trade names and trademarks. There were no impairment charges recognized to our consolidated statement of operations during the years ended December 31, 2017, 2016 and 2015 related to our goodwill or intangible assets. The following table presents the components of our intangible assets with definite lives for the periods presented: December 31, 2017 December 31, 2016 Weighted Average Gross Net Gross Net Remaining Life Carrying Accumulated Carrying Carrying Accumulated Carrying (in years) Amount Amortization Amount Amount Amortization Amount (in millions) (in millions) Trade names and trademarks 6.8 $ 58 $ (20 ) $ 38 $ 56 $ (14 ) $ 42 Customer lists and supplier relationships 3.6 87 (43 ) 44 84 (31 ) 53 Subscriber relationships 4.3 35 (22 ) 13 33 (15 ) 18 Technology and other 2.6 44 (27 ) 17 44 (20 ) 24 Total 4.6 $ 224 $ (112 ) $ 112 $ 217 $ (80 ) $ 137 Refer to “Note 3— Acquisitions and Dispositions Our definite-lived intangible assets are being amortized on a straight-line basis. The straight-line method of amortization is currently our best estimate, or approximates to date, the distribution of the economic use of these intangible assets. The estimated amortization expense for intangible assets with definite lives for each of the next five years, and the expense thereafter, assuming no subsequent impairment of the underlying assets or change in estimate of remaining lives, is expected to be as follows (in millions): 2018 $ 31 2019 27 2020 22 2021 14 2022 7 2023 and thereafter 11 Total $ 112 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9: DEBT The Company’s outstanding debt consisted of the following for the periods presented: December 31, December 31, 2017 2016 (in millions) Short-Term Debt: Chinese Credit Facilities $ 7 $ 7 2016 Credit Facility - 73 Total Short-Term Debt (1) $ 7 $ 80 Long-Term Debt: 2015 Credit Facility $ 230 $ 91 Total Long-Term Debt $ 230 $ 91 (1) The weighted-average interest rate on short-term debt was 5.0% as of December 31, 2017 and 2.1% as of December 31, 2016. 2011 Credit Facility In December 2011, we entered into a credit agreement (the “2011 Credit Facility”) with a group of lenders, which provided $600 million of borrowing including: — a term loan facility in an aggregate principal amount of $400 million with a term of five years due December 2016 (“Term Loan”); and — a revolving credit facility in an aggregate principal amount of $200 million available in U.S. dollars, Euros and British pound sterling with a term of five years expiring December 2016. In June 2015, the entire outstanding principal on our Term Loan in the amount of $290 million was repaid with borrowings from our 2015 Credit Facility (described below) and the 2011 Credit Facility was subsequently terminated. During the year ended December 31, 2015, we recorded total interest and commitment fees on our 2011 Credit Facility of $3 million to interest expense on our consolidated statements of operations. There was no resulting loss on early extinguishment of this debt. 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”) and immediately borrowed $290 million. In May 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. During the year ended December 31, 2017, the Company borrowed an additional $435 million and repaid $296 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 15 - Stockholders Equity As of December 31, 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 was borrowing under a one-month interest rate period or a weighted average rate of 2.74% per annum as of December 31, 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 December 31, 2017, our unused revolver capacity was 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 December 31, 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 $6 million, $4 million and $2 million for the years ended December 31, 2017, 2016 and 2015, respectively, to interest expense on our consolidated statements of operations. All unpaid interest and commitment fee amounts as of December 31, 2017 and December 31, 2016, respectively, were not material. We also incurred lender fees and debt financing costs totaling $3 million in connection with entering into the 2015 Credit Facility in June 2015, which were capitalized as deferred financing costs and recorded to other long-term assets on the consolidated balance sheet. In connection with the First Amendment, in May 2017, 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 consolidated balance sheet. As of December 31, 2017, the Company has $3 million remaining in deferred financing costs in connection with the 2015 Credit Facility. These costs are being amortized over the remaining term on a straight line basis and recorded to interest expense on our consolidated statements of operations. The resulting write down of previous deferred financing costs as a result of the First Amendment was not material. There is no specific repayment date prior to the maturity date for borrowings under this credit agreement. 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. Additionally, the Company believes that the likelihood of the lender exercising any subjective acceleration rights, which would permit the lenders to accelerate repayment of any outstanding borrowings, is remote. As such, we classify borrowings under this facility as long-term debt. 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. As of December 31, 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 connection with the 2016 Credit Facility, any lender fees and debt financing costs paid were not material. There are no specific financial or incurrence covenants. We borrowed $73 million from this uncommitted credit facility in September 2016 and repaid the full amount during the first three months of 2017. These funds were used for general working capital needs of the Company, primarily for partial repayment of our 2015 Credit Facility and recorded in current portion of debt on our consolidated balance sheet at December 31, 2016. We had no outstanding borrowings under this 2016 Credit Facility as of December 31, 2017. During the years ended December 31, 2017 and 2016, total interest recorded with respect to our 2016 Credit Facility to interest expense on our consolidated statement of operations were not material. Chinese Credit Facilities In addition to our 2015 Credit Facility and 2016 Credit Facility, we maintain two credit facilities in China (jointly, the “Chinese Credit Facilities”). 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 December 31, 2017 and 2016, 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”). Our Chinese Credit Facility—JPM generally bears 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 both December 31, 2017 and December 31, 2016, we had $7 million of outstanding borrowings from the Chinese Credit Facility – JPM at a weighted average rate of 5.00% and 4.35%, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10: INCOME TAXES The following table presents a summary of our domestic and foreign income before income taxes: Year Ended December 31, 2017 2016 2015 (in millions) Domestic $ 81 $ 64 $ 67 Foreign 29 87 172 Total $ 110 $ 151 $ 239 The following table presents a summary of the components of our provision for income taxes: Year Ended December 31, 2017 2016 2015 (in millions) Current income tax expense: Federal $ 93 $ 38 $ 48 State 1 2 8 Foreign 6 11 22 Current income tax expense 100 51 78 Deferred income tax expense (benefit): Federal 25 (12 ) (29 ) State 2 (3 ) (2 ) Foreign 2 (5 ) (6 ) Deferred income tax expense (benefit): 29 (20 ) (37 ) Provision for income taxes $ 129 $ 31 $ 41 The Company reduced its current income tax payable by $27 million, $21 million and $63 million for the years ended December 31, 2017, 2016 and 2015, respectively, for tax deductions attributable to the exercise or settlement of the Company’s stock-based awards. The significant components of our deferred tax assets and deferred tax liabilities as of December 31, 2017 and 2016 are as follows: December 31, 2017 2016 (in millions) Deferred tax assets: Stock-based compensation $ 36 $ 52 Net operating loss carryforwards 56 46 Provision for accrued expenses 4 12 Deferred rent 3 5 Lease financing obligation 22 33 Foreign advertising spend 13 10 Deferred expense related to cost-sharing arrangement 26 30 Interest carryforward 7 — Charitable contribution carryforward — 20 Other 7 7 Total deferred tax assets $ 174 $ 215 Less: valuation allowance (55 ) (27 ) Net deferred tax assets $ 119 $ 188 Deferred tax liabilities: Intangible assets $ (59 ) $ (83 ) Property and equipment (21 ) (28 ) Prepaid expenses (4 ) (6 ) Building - corporate headquarters (20 ) (31 ) Deferred income related to cost-sharing arrangement (13 ) (10 ) Total deferred tax liabilities $ (117 ) $ (158 ) Net deferred tax asset (liability) $ 2 $ 30 At December 31, 2017, we had federal, state and foreign net operating loss carryforwards (“NOLs”) of approximately $9 million, $41 million and $171 million, respectively. If not utilized, the federal and state NOLs will expire at various times between 2020 and 2037 and the foreign NOLs will expire at various times between 2018 and 2028. As of December 31, 2017, we had a valuation allowance of approximately of $55 million related to certain NOL carryforwards for which it is more likely than not, the tax benefit will not be realized. This amount represented an overall increase of $28 million over the amount recorded as of December 31, 2016. The increase is primarily related to additional foreign net operating losses. Except for such foreign deferred tax assets, we expect to realize all of our deferred tax assets based on a strong history of earnings in the U.S. and other jurisdictions, as well as future reversals of taxable temporary differences. A reconciliation of the provision for income taxes to the amounts computed by applying the statutory federal income tax rate to income before income taxes is as follows: Year Ended December 31, 2017 2016 2015 (in millions) Income tax expense at the federal statutory rate of 35% $ 38 $ 53 $ 84 Foreign rate differential (25 ) (35 ) (53 ) State income taxes, net of effect of federal tax benefit 5 4 4 Unrecognized tax benefits and related interest 12 11 12 Change in cost-sharing treatment of stock-based compensation (5 ) (6 ) (13 ) Non-deductible transaction costs — — 1 Impacts related to the 2017 Tax Act 73 — — Research tax credit (8 ) (10 ) (3 ) Stock-based compensation 13 2 2 Change in valuation allowance 25 9 5 Other, net 1 3 2 Provision for income taxes $ 129 $ 31 $ 41 During 2011, the Singapore Economic Development Board accepted our application to receive a tax incentive under the International Headquarters Award. This incentive provides for a reduced tax rate on qualifying income of 5% as compared to Singapore’s statutory tax rate of 17% and is conditional upon our meeting certain employment and investment thresholds. This agreement has been extended until June 30, 2021 as we have met certain employment and investment thresholds. This benefit resulted in a decrease to our 2017 provision for income tax expense of $1 million. The 2017 Tax Act was signed into United States tax law on December 22, 2017. The 2017 Tax Act significantly changes the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The 2017 Tax Act also provides for a mandatory one-time tax on the deemed repatriation of accumulative foreign earnings of foreign subsidiaries (the “Transition Tax”), as well as prospective changes beginning in 2018, including additional limitations on executive compensation. Under GAAP, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. On December 22, 2017, the Securities and Exchange Commission issued SAB 118, which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The measurement period is deemed to have ended earlier when the registrant has obtained, prepared, and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the 2017 Tax Act. Our financial results, including an estimate of $67 million of Transition Tax, and $6 million recorded due to a remeasurement of our net deferred tax assets, reflect provisional amounts for those specific income tax effects of the 2017 Tax Act for which the accounting under ASC Topic 740 is incomplete but a reasonable estimate could be determined. The Company has not obtained, prepared and Other significant provisions that are not yet effective but may impact income taxes in future years include: an exemption from U.S. tax on dividends of future foreign earnings, limitations on the deductibility of certain executive compensation, an incremental tax (base erosion anti-abuse tax or “BEAT”) on excessive amounts paid to foreign related parties, deductions related to foreign derived intangible income, and a minimum tax on certain foreign earnings in excess of 10 percent of the foreign subsidiaries tangible assets (i.e., global intangible low-taxed income or “GILTI”). We are still evaluating whether to make a policy election to treat the GILTI tax as a period expense or to provide U.S. deferred taxes on foreign temporary differences that are expected to generate GILTI income when they reverse in future years. By virtue of previously filed consolidated income tax returns filed with Expedia, we are currently under an IRS audit for the 2009, 2010, and short-period 2011 tax years, and have various ongoing state income tax audits. We are separately under examination by the IRS for the short-period 2011, 2012 and 2013 tax years and have commenced an employment tax audit with the IRS for the 2013 and 2014 tax years. These audits include questioning of the timing and the amount of income and deductions and the allocation of income among various tax jurisdictions. These examinations may lead to proposed or ordinary course adjustments to our taxes. We are no longer subject to tax examinations by tax authorities for years prior to 2009. As of December 31, 2017, no material assessments have resulted, except as noted below regarding our 2009 and 2010 IRS audit with Expedia. In January 2017, as part of the Company’s IRS audit of Expedia, 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 of $10 million to $14 million 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. 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 would 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. $6 million in its consolidated statements of operations for the years ended December 31, 2017 and 2016, respectively. The Company will continue to monitor this matter and related potential impacts to its consolidated financial statements. Cumulative undistributed earnings of foreign subsidiaries totaled approximately $882 million as of December 31, 2017. Subsequent to December 31, 2017, on February 2, 2018, TripAdvisor made a one-time repatriation of $325 million of foreign earnings to the United States primarily to repay our remaining outstanding debt under the 2015 Credit Facility. Refer to “Note 20— Subsequent Events A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows: December 31, 2017 2016 2015 (in millions) Balance, beginning of year $ 105 $ 89 $ 67 Increases to tax positions related to the current year 17 16 15 Increases to tax positions related to the prior year 1 1 7 Reductions due to lapsed statute of limitations — (1 ) — Decreases to tax positions related to the prior year — — — Settlements during current year — — — Balance, end of year $ 123 $ 105 $ 89 As of December 31, 2017, we had $123 million of unrecognized tax benefits, net of interest, which is classified as long-term and included in other long-term liabilities and deferred income taxes, net on our consolidated balance sheet. The amount of unrecognized tax benefits, if recognized, would reduce income tax expense by $78 million, due to correlative adjustments in other tax jurisdictions. We recognize interest and penalties related to unrecognized tax benefits in income tax expense on our consolidated statement of operations. As of December 31, 2017 and 2016, total gross interest accrued was $13 million and $9 million, respectively. We do not anticipate any material changes in the next fiscal year. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 11: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Accrued employee salary, bonus, and related benefits $ 60 $ 53 Accrued marketing costs 39 37 Other 37 37 Total $ 136 $ 127 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Noncurrent [Abstract] | |
Other Long-Term Liabilities | NOTE 12: OTHER LONG-TERM LIABILITIES Other long-term liabilities consisted of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Unrecognized tax benefits (1) $ 127 $ 108 Long-term income taxes payable (2) 61 $ - Financing obligation, net of current portion (3) 84 84 Other (4) 21 18 Total $ 293 $ 210 (1) Refer to “Note 10— Income Taxes (2) Amount relates to the long-term portion of Transition Tax related to 2017 Tax Act at December 31, 2017. Refer to “Note 10 – Income Taxes (3) Refer to “Note 13 – Commitments and Contingencies (4) Amounts primarily consist of long-term deferred rent balances related to our operating leases for office space. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13: COMMITMENTS AND CONTINGENCIES We have material commitments and obligations that include office space leases, and expected interest and commitment fees on long-term debt, which are not accrued on the consolidated balance sheet at December 31, 2017 but we expect to require future cash outflows. The following table summarizes our material commitments and obligations as of December 31, 2017: By Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years (in millions) Property leases, net of sublease income (1) $ 228 $ 28 $ 53 $ 51 $ 96 Expected interest and commitment fee payments on 2015 Credit Facility (2) 34 7 16 11 — Total (3) $ 262 $ 35 $ 69 $ 62 $ 96 (1) Estimated future minimum rental payments under operating leases with non-cancelable lease terms, including our corporate headquarters lease in Needham, MA. (2) Expected interest payments on the 2015 Credit Facility are based on the effective interest rate and outstanding borrowings as of December 31, 2017, but could change significantly in the future. Amounts assume that our existing debt is repaid at the end of the credit agreement and do not assume additional borrowings or refinancing of existing debt. Expected commitment fee payments are based on the unused portion of credit facility, issued letters of credit, and current effective commitment fee rate as of December 31, 2017; however, these variables could change significantly in the future. Refer to “Note 9— Debt Subsequent Events (3) Excluded from the table was $127 million of unrecognized tax benefits, including accrued interest, that we have recorded in other long-term liabilities on our consolidated balance sheet for which we cannot make a reasonably reliable estimate of the amount and period of payment. We do not anticipate any material changes in the next year. Also excluded from the table was $61 million of estimated Transition Tax related to 2017 Tax Act recorded in long-term liabilities on the consolidated balance sheet at December 31, 2017, that we believe the majority will be paid more than five years from December 31, 2017. Refer to “Note 10 – Income Taxes Office Lease Commitments We have contractual obligations in the form of operating leases for office space for which we record the related expense on a monthly basis. Certain leases contain periodic rent escalation adjustments and renewal options. Rent expense related to such leases is recorded on a straight-line basis. Office lease commitments expire at various dates with the latest maturity in December 2030. For the years ended December 31, 2017, 2016 and 2015, we recorded rental expense of $18 million, $18 million and $19 million, respectively, net of sublease income of $3 million, $2 million and $1 million, respectively. Corporate Headquarters Lease In June 2013, we entered into a lease, for a new corporate headquarters (the “Lease”). Pursuant to the Lease, the landlord built an approximately 280,000 square foot rental building in Needham, Massachusetts (the “Premises”), and leased the Premises to the Company as our new corporate headquarters for an initial term of 15 years and 7 months or through December 2030. The Company also has an option to extend the term of the Lease for two consecutive terms of five years each. Because we were involved in the construction project and were responsible for paying a portion of the costs of normal finish work and structural elements of the Premises, the Company was deemed for accounting purposes to be the owner of the Premises during the construction period under build to suit lease accounting guidance under GAAP. Therefore, the Company recorded project construction costs during the construction period incurred by the landlord as a construction-in-progress asset and a related construction financing obligation on our consolidated balance sheets. The amounts that the Company has paid or incurred for normal tenant improvements and structural improvements had also been recorded to the construction-in-progress asset. Upon completion of construction at end of the second quarter of 2015, we evaluated the construction-in-progress asset and construction financing obligation for de-recognition under the criteria for “sale-leaseback” treatment under GAAP. We concluded that we have forms of continued economic involvement in the facility, and therefore did not meet the provisions for sale-leaseback accounting. This determination was based on the Company's continuing involvement with the property in the form of non-recourse financing to the lessor. Therefore, the Lease is accounted for as a financing obligation. Accordingly, we began depreciating the building asset over its estimated useful life and incurring interest expense related to the financing obligation imputed using the effective interest rate method. We bifurcate our lease payments pursuant to the Premises into: (i) a portion that is allocated to the building (a reduction to the financing obligation) and; (ii) a portion that is allocated to the land on which the building was constructed. The portion of the lease obligations allocated to the land is treated as an operating lease that commenced in 2013. The lease costs allocated to the land are recognized as rent expense on a straight-line basis over the term of the lease and are recorded in general and administrative expense in the consolidated statements of operations. The financing obligation is considered a long-term finance lease obligation and is recorded to other long-term liabilities on our consolidated balance sheet. At the end of the lease term, the carrying value of the building asset and the remaining financing obligation are expected to be equal, at which time we may either surrender the leased asset as settlement of the remaining financing obligation or extend the initial term of the lease for the continued use of the asset. In the years ended December 31 2017, 2016, and 2015, the Company recorded $7 million, $7 million, and $4 million of interest expense, respectively, $3 million, $3 million, and $2 million of depreciation expense, respectively, and $2 million, $2 million, $1 million, of rent expense in general and administrative expense on our consolidated statements of operations, respectively, related to the Premises. Additional United States and International Locations We also lease an aggregate of approximately 450,000 square feet of office space at approximately 40 other locations across North America, Europe and Asia Pacific, in cities such as, New York, Boston, London, Sydney, Barcelona, Paris, and Beijing, primarily for our sales offices, subsidiary headquarters, and international management teams, pursuant to leases with various expiration dates, with the latest expiring in June 2027. As of December 31, 2017 Year Corporate Headquarters Lease (1) Other Operating Leases Sublease Income Total Lease Commitments (Net of Sublease Income) (in millions) 2018 $ 9 $ 22 $ (3 ) $ 28 2019 9 21 (3 ) 27 2020 9 19 (2 ) 26 2021 10 17 (2 ) 25 2022 10 17 (1 ) 26 Thereafter 77 19 — 96 Total $ 124 $ 115 $ (11 ) $ 228 (1) Amount includes an $84 million financing obligation, which we have recorded in other long-term liabilities on our consolidated balance sheet at December 31, 2017, related to our corporate headquarters lease. Letters of Credit As of December 31, 2017, we have issued unused letters of credit totaling approximately $3 million, related to our property leases, which includes $1 million delivered to the landlord of our corporate headquarters as security deposit, which amount is subject to increase under certain circumstances. 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 As described above, 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. We continue to accumulate cash flows, in foreign jurisdictions which we consider indefinitely reinvested, although we will continue to evaluate the impact of the 2017 Tax Act on our capital deployment within and outside the U.S. Any repatriation of funds currently held in foreign jurisdictions may result in higher effective tax rates and incremental cash tax payments. Refer to “Note 10— Income Taxes |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE 14: EMPLOYEE BENEFIT PLANS Retirement Savings Plan The TripAdvisor Retirement Savings Plan (the “401(k) Plan”), qualifies under Section 401(k) of the Internal Revenue Code. The 401(k) Plan allows participating employees, most of our U.S. employees, to make contributions of a specified percentage of their eligible compensation. Participating employees may contribute up to 50% of their eligible salary on a pre-tax basis, but not more than statutory limits. Employee-participants age 50 and over may also contribute an additional amount of their salary on a pre-tax tax basis up to the IRS Catch-Up Provision Limit, or catch-up contributions. Employees may also contribute into the 401(k) Plan on an after-tax basis up to an annual maximum of 10%. The 401(k) Plan has an automatic enrollment feature at 6% pre-tax. We match 50% of the first 6% of employee contributions to the plan for a maximum employer contribution of 3% of a participant’s eligible earnings. The “catch up contributions”, are not eligible for employer matching contributions. The matching contributions portion of an employee’s account, vests after two years of service. The Plan also permits certain after-tax Roth 401(k) contributions. Additionally, at the end of the 401(k) Plan year, we make a discretionary matching contribution to eligible participants. This additional discretionary matching employer contribution referred to as “true up” is limited to match only contributions up to 3% of eligible compensation. We also have various defined contribution plans for our international employees. Our contribution to the 401(k) Plan and our international defined contribution plans which are recorded in our consolidated statement of operations for the years ended December 31, 2017, 2016 and 2015 were $9 million, $9 million, and $7 million, respectively. TripAdvisor, Inc. Deferred Compensation Plan for Non-Employee Directors The Company also has a Deferred Compensation Plan for Non-Employee Directors (the “Plan”). Under the Plan, eligible directors who defer their directors’ fees may elect to have such deferred fees (i) applied to the purchase of share units, representing the number of shares of our common stock that could have been purchased on the date such fees would otherwise be payable, or (ii) credited to a cash fund. The cash fund will be credited with interest at an annual rate equal to the weighted average prime or base lending rate of a financial institution selected in accordance with the terms of the Plan and applicable law. Upon termination of service as a director of TripAdvisor, a director will receive (i) with respect to share units, such number of shares of our common stock as the share units represent, and (ii) with respect to the cash fund, a cash payment. Payments upon termination will be made in either one lump sum or up to five annual installments, as elected by the eligible director at the time of the deferral election. Under the 2011 Incentive Plan, 100,000 shares of TripAdvisor common stock are available for issuance to non-employee directors. From the inception of the Plan through December 31, 2017, a total of 3,336 shares have been reserved for such purpose. TripAdvisor, Inc. Executive Severance Plan and Summary Plan Description Effective August 7, 2017, the Company adopted an Executive Severance Plan and Summary Plan Description (the “Severance Plan”) applicable to certain employees of the Company and its subsidiaries. The Severance Plan formalizes and standardizes the Company’s severance practices for certain designated employees (each, a “Participant” and, collectively, the “Participants”). Participants covered by the Severance Plan generally will be eligible to receive severance benefits in the event of a termination by the Company without Cause or, under certain circumstances, by the Participant for Good Reason. The severance benefits differ if there is a termination of employment in connection with a Change in Control. The severance benefits provided pursuant to the Severance Plan are determined based on the job classification of the Participants (as reflected in internal job profile designations) and, in certain cases, their years of service with the Company. Under the Severance Plan, in the event of a termination by the Company without Cause more than three months prior to a Change in Control or more than twelve (12) months following a Change in Control, the severance benefits for the Participant generally shall consist of the following: • continued payment of base salary for a period of six to eighteen (18) months following the date of such Participant’s termination of employment; and • continuation of coverage under the Company’s health insurance plan through the Company’s payment of COBRA premiums for a period of six to eighteen (18) months following the date of such Participant’s termination of employment. Under the Severance Plan, in the event of a termination by the Company without Cause or by the Participant for Good Reason, in each case within three months prior to or twelve (12) months following a Change in Control, the severance benefits for the Participant shall consist of the following: • payment of a lump sum amount equal to (i) twelve (12) to twenty four (24) months of the Participant’s Base Salary, plus (ii) the Participant’s Target Bonus multiplied by 1, 1.5 or 2; and • payment of a lump sum amount equal to the premiums required to continue the Participant’s medical coverage under the Company’s health insurance plan for a period of twelve (12) to twenty four (24) months. The foregoing summary is qualified in its entirety by reference to the Executive Severance Plan and Summary Plan Description incorporated herein by reference as Exhibit 10.22 to this Annual Report on Form 10-K. During the year end December 31, 2017, we recorded $1 million of severance under the Severance Plan in our consolidated statement of operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 15: STOCKHOLDERS’ EQUITY Preferred Stock In addition to common stock, we are authorized to issue up to 100 million preferred shares, with $ 0.001 par value per share, with terms determined by our Board of Directors, without further action by our stockholders. At December 31, 2017, no preferred shares had been issued. Common Stock and Class B Common Stock Our authorized common stock consists of 1.6 billion shares of common stock with par value of $0.001 per share, and 400 million shares of Class B common stock with par value of $0.001 per share. Both classes of common stock qualify for and share equally in dividends, if declared by our Board of Directors. Common stock is entitled to one vote per share and Class B common stock is entitled to 10 votes per share on most matters. Holders of TripAdvisor common stock, acting as a single class, are entitled to elect a number of directors equal to 25% percent of the total number of directors, rounded up to the next whole number, which was three directors as of December 31, 2017. Class B common stockholders may, at any time, convert their shares into common stock, on a one for one share basis. Upon conversion, the Class B common stock is retired and is not available for reissue. In the event of liquidation, dissolution, distribution of assets or winding-up of TripAdvisor the holders of both classes of common stock have equal rights to receive all the assets of TripAdvisor after the rights of the holders of the preferred stock have been satisfied. There were 135,617,263 and 126,142,773 shares of common stock issued and outstanding, respectively, and 12,799,999 shares of Class B common stock issued and outstanding at December 31, 2017. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive loss is primarily comprised of accumulated foreign currency translation adjustments, as follows for the periods presented: December 31, 2017 December 31, 2016 (in millions) Cumulative foreign currency translation adjustments (1) $ (42 ) $ (77 ) Total accumulated other comprehensive loss (2) $ (42 ) $ (77 ) (1) Due to our intention to indefinitely reinvest foreign subsidiary earnings; deferred taxes are not provided on foreign currency translation adjustments. (2) Our accumulated net unrealized gain (loss) on available for sale securities was not material as of December 31, 2017 and December 31, 2016. Treasury Stock On February 15, 2013, our Board of Directors authorized the repurchase of $250 million of our shares of common stock under a share repurchase program. During the year ended December 31, 2015, we did not repurchase any shares of outstanding common stock under the share repurchase program. During the year ended December 31, 2016, we repurchased 2,002,356 shares of outstanding common stock under the share repurchase program at an average cost of $52.35 per share. As of December 31, 2016, we had repurchased a total of 4,123,065 shares of outstanding common stock under the share repurchase program at an average cost of $60.63 per share and completed our share repurchase program authorized by our Board of Directors. On January 25, 2017, our Board of Directors authorized an additional 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. During the year ended December 31, 2017, we 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. As of December 31, 2017, there were 9,474,490 shares of the Company’s common stock held in treasury with an aggregate cost of $447 million. In December 2015, we issued 801,042 treasury shares to the Foundation in settlement of all future pledge obligations. Refer to “Note 17 – Segment and Geographic Information Dividends During the years ended December 31, 2017, 2016, and 2015, our Board of Directors did not declare any dividends on our outstanding common stock and do not expect to pay any dividends for the foreseeable future. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16: RELATED PARTY TRANSACTIONS Relationship between Expedia and TripAdvisor Upon consummation of the Spin-Off, Expedia was considered a related party under GAAP based on a number of factors, including, among others, common ownership of our shares and those of Expedia. However, we no longer consider Expedia a related party. For purposes of governing certain of the ongoing relationships between us and Expedia at and after the Spin-Off, and to provide for an orderly transition, we and Expedia entered into various agreements at the time of the Spin-Off, which TripAdvisor has satisfied its obligations. However, TripAdvisor continues to be subject to certain post-spin obligations under the Tax Sharing Agreement. Under the Tax Sharing Agreement between us and Expedia, we are generally required to indemnify Expedia for any taxes resulting from the Spin-Off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) to the extent such amounts resulted from (i) any act or failure to act by us described in the covenants in the tax sharing agreement, (ii) any acquisition of our equity securities or assets or those of a member of our group, or (iii) any failure of the representations with respect to us or any member of our group to be true or any breach by us or any member of our group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel. The full text of the Tax Sharing Agreement is incorporated by reference in this Annual Report on Form 10-K as Exhibit 10.2. Refer to “Note 10— Income Taxes Relationship between Liberty TripAdvisor Holdings, Inc. and TripAdvisor We consider Liberty TripAdvisor Holdings, Inc. (“LTRIP”) a related party. As of December 31, 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 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 57.5% of our voting power. Refer to “Note 1— Organization and Business Description We had no related party transactions with LTRIP during the years ended December 31, 2017, 2016 or 2015. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 17: SEGMENT AND GEOGRAPHIC 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 travel partners’ sites. Our click-based travel partners are predominantly online travel agencies, or OTAs, and direct suppliers in the hotel 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, or metasearch auction, 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 via our website. • TripAdvisor-branded Display-based Advertising and Subscription Revenue. Travel 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 sell display-based advertising to OTAs and other travel related businesses, as well as advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions, or CPM, basis. In addition, we offer subscription-based advertising to hotels, B&Bs and other specialty lodging properties. Subscription advertising is predominantly sold for a flat fee and enables subscribers to enhance their listing, for a contracted period of time, on our TripAdvisor-branded websites, including by posting special offers for travelers. • Other Hotel Revenue. Our other hotel revenue primarily includes revenue from non-TripAdvisor branded websites, such as www.bookingbuddy.com, www.cruisecritic.com, and www.onetime.com, which includes click-based advertising revenue, display-based advertising revenue, hotel room reservations sold through the 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, book and experience activities and attractions in popular travel destinations both through Viator, our dedicated Attractions business, and on our TripAdvisor website and applications. We predominately generate commissions 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 for its affiliate partners, including some of the world’s top airlines, hotel chains and online and offline travel agencies. Viator’s bookable activities and attractions are available on Viator-branded websites and mobile applications and on 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, and on our TripAdvisor website and applications. TheFork is an online restaurant booking platform operating on a number of websites (including www.lafourchette.com, www.eltenedor.com, www.iens.nl and www.dimmi.com.au), with a network of restaurant partners located primarily across Europe and Australia. We generate reservation revenues that are paid by restaurants for diners seated through TheFork’s online reservation systems, and generate subscription fees for our online booking and marketing analytics tools provided by TheFork and by TripAdvisor. TheFork’s bookable restaurants are available on www.thefork.com and 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 primarily by offering individual property owners and property managers the ability to list their properties on our websites and mobile applications thereby connecting homeowners with travelers through a free-to-list, commission-based option and, to a lesser extent, by an annual subscription-based fee structure. These properties are listed on www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, and on our TripAdvisor-branded websites and mobile applications. 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 CEO. 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 years ended December 31, 2017, 2016 and 2015, and includes 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 use this information to evaluate operating segments. Accordingly, we 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. Year ended December 31, 2017 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,196 $ 360 $ — $ 1,556 Adjusted EBITDA (1) 286 45 — 331 Depreciation (79 ) (79 ) Amortization of intangible assets (32 ) (32 ) Stock-based compensation (96 ) (96 ) Operating income 124 Other expense, net (14 ) Income before income taxes 110 Provision for income taxes (2) (129 ) Net loss $ (19 ) Year ended December 31, 2016 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,190 $ 290 $ — $ 1,480 Adjusted EBITDA (1) 380 (28 ) — 352 Depreciation (69 ) (69 ) Amortization of intangible assets (32 ) (32 ) Stock-based compensation (85 ) (85 ) Operating income 166 Other expense, net (15 ) Income before income taxes 151 Provision for income taxes (31 ) Net income $ 120 Year ended December 31, 2015 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,263 $ 229 $ — $ 1,492 Adjusted EBITDA (1) 472 (6 ) — 466 Depreciation (57 ) (57 ) Amortization of intangible assets (36 ) (36 ) Stock-based compensation (72 ) (72 ) Non-cash charitable contribution (3) (67 ) (67 ) Other non-recurring expenses (2 ) (2 ) Operating income 232 Other income, net 7 Income before income taxes 239 Provision for income taxes (41 ) Net income $ 198 (1) Includes allocated general and administrative expenses in our Hotel segment of $81 million, $80 million and $85 million; and in our Non-Hotel segment of $42 million, $38 million and $28 million for the years ended December 31, 2017, 2016 and 2015, respectively. (2) The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” (3) During the fourth quarter of 2015, we incurred an expense in the amount of $67 million to reflect a non-cash contribution to The TripAdvisor Charitable Foundation (the “Foundation”), which was recorded to general and administrative expense in our consolidated statement of operations. TripAdvisor had historically funded 2% of its annual operating income before amortization and stock-based compensation. TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount equal to eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under its pledge agreement in December 2015. We settled this obligation in treasury shares based on the fair value of our common stock on the date the treasury shares were issued to the Foundation and therefore given the use of stock to settle the obligation, the amount has been excluded from Adjusted EBITDA. TripAdvisor does not expect to make any future contributions to the Foundation. Revenue and Geographic Information Our revenue sources within our Hotel segment, which are TripAdvisor-branded click-based and transaction revenue, TripAdvisor-branded display-based advertising and subscription revenue; and other hotel revenue, which along with our Non-Hotel revenue source, comprise our products. The following table presents revenue by source for the periods presented: Year ended December 31, 2017 2016 2015 (in millions) TripAdvisor-branded click-based and transaction $ 756 $ 750 $ 837 TripAdvisor-branded display-based advertising and subscription 292 282 272 Other hotel revenue 148 158 154 Non-hotel revenue 360 290 229 Total revenue $ 1,556 $ 1,480 $ 1,492 The following table presents revenue by geographic area, the United States, the United Kingdom and all other countries, based on the geographic location of our websites for the periods presented: Year ended December 31, 2017 2016 2015 (in millions) Revenue United States $ 877 $ 799 $ 739 United Kingdom 209 210 215 All other countries 470 471 538 Total revenue $ 1,556 $ 1,480 $ 1,492 The following table presents property and equipment, net for the United States and all other countries based on the geographic location of the assets for the periods presented: December 31, 2017 2016 (in millions) Property and equipment, net United States $ 219 $ 222 All other countries 44 38 Total $ 263 $ 260 |
Interest Income and Other, Net
Interest Income and Other, Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Income And Expenses [Abstract] | |
Interest Income and Other, Net | NOTE 18: INTEREST INCOME AND OTHER, NET The following table presents the detail of interest income and other, net, for the periods presented: Year Ended December 31, 2017 2016 2015 (in millions) Net gain (loss), realized and unrealized, on foreign currency exchange and foreign currency derivative contracts and other, net $ 2 $ (4 ) $ (4 ) Interest income 1 1 1 Loss on cost method investment (2 ) — — Gain on sale of business (1) — — 20 Total $ 1 $ (3 ) $ 17 (1) Refer to “Note 3 – Acquisitions and Dispositions |
Quarterly Financial Information
Quarterly Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | NOTE 19: QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following table presents selected unaudited financial information for the eight quarters in the period ended December 31, 2017. The results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period to period comparisons should not be relied upon as an indication of future performance. Three Months Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Year ended December 31, 2017 Revenue $ 372 $ 424 $ 439 $ 321 Operating income 27 46 42 9 Net income (loss) (1) 13 27 25 (84 ) Basic earnings (loss) per share (2) $ 0.09 $ 0.19 $ 0.18 $ (0.60 ) Diluted earnings (loss) per share (2) $ 0.09 $ 0.19 $ 0.18 $ (0.60 ) Year ended December 31, 2016 Revenue $ 352 $ 391 $ 421 $ 316 Operating income 42 47 66 10 Net income 29 34 55 1 Basic earnings per share (2) $ 0.20 $ 0.23 $ 0.38 $ 0.01 Diluted earnings per share (2) $ 0.20 $ 0.23 $ 0.37 $ 0.01 (1) (2) During the fourth quarter of 2017, we recognized $67 million of Transition Tax and $6 million of tax expense recorded for the remeasurement of our net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share may not equal the total computed for the year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 20: SUBSEQUENT EVENTS On January 31, 2018, TripAdvisor’s Board of Directors authorized up to $250 million of share repurchases. 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. This new repurchase program has no expiration but may be suspended or terminated by the Board of Directors at any time. On February 2, 2018, the Company made a one-time repatriation of $325 million of foreign earnings to the United States primarily to repay outstanding borrowings under the 2015 Credit Facility. The remaining outstanding borrowings under the 2015 Credit Facility was subsequently repaid by the Company. |
Significant Accounting Polici29
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying 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. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). We believe that the assumptions underlying our consolidated financial statements are reasonable. However, these consolidated financial statements do not present our future financial position, the results of our future operations and cash flows. One of our subsidiaries that operates in China has variable interests in affiliated entities 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 these Chinese affiliates, we consolidate their results as we are the primary beneficiary of the cash losses or profits of these variable interest affiliates and have the power to direct the activity of these affiliates. Our variable interest entities’ financials were not material for all periods presented. |
Accounting Estimates | Accounting Estimates We use estimates and assumptions in the preparation of our 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 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 consolidated financial statements include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. Refer to “Note 10 - Income Taxes” |
Revenue Recognition | Revenue Recognition We recognize revenue from our services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. Deferred revenue, which primarily relates to our subscription-based and commission based arrangements, is recorded when payments are received in advance of our performance as required by the underlying agreements. Click-based advertising and transaction revenue . Click-based revenue is derived primarily from click-through fees charged to our travel partners for traveler leads sent to the travel partners’ website. We record revenue from click-through fees in the same period as when the traveler makes the click-through to the travel partners’ website. Our instant booking transaction model revenue is comprised of commissions earned on all valid instant booking reservations. In a transaction model, our instant booking commission revenue is recorded at the time a traveler books a hotel transaction on our partner’s site where we, as facilitator for such booking, do not assume associated cancellation risk. Under the other instant booking model, called the consumption model, we assume cancellation risk associated with booking, and we record that revenue when the traveler’s stay at a hotel occurs. We have no post-booking service obligations for all instant booking transactions, regardless of the model chosen. Display-based and subscription-based advertising . We recognize display-based advertising revenue ratably over the advertising period or upon delivery of advertising impressions, depending on the terms of the advertising contract. Subscription-based advertising revenue is recognized ratably over the related contractual period over which service is delivered. Attractions . We work with local operators, or merchant partners, to provide travelers with access to tours and activities in popular destinations worldwide, earning a commission for such service. While the merchant of record, we receive cash from the consumer at the time of booking of the destination activity and record these amounts, net of commissions, as deferred merchant payables on our consolidated balance sheet. Commission revenue is recorded as deferred revenue at the time of booking and later recognized when the consumer has completed the destination activity. We pay the destination activity operators after the travelers’ use. In transactions where we are not the merchant of record, we invoice and receive commissions directly from our merchant partners and record commission revenue when the consumer has completed the destination activity. Restaurants. We recognize reservation revenues (or per seated diner fees) on a transaction-by-transaction basis as diners are seated by our restaurant customers. Subscription-based revenue is recognized ratably over the related contractual period over which the service is delivered. Vacation Rentals. We generate revenue from customers primarily on either a subscription basis over a fixed-term, or on a commission basis for transactions that are booked on our platform. Payments for term-based subscriptions, related to online advertising services for the listing of vacation rental properties for rent, received in advance of services being rendered are recorded as deferred revenue and recognized ratably to revenue on a straight-line basis over the listing period. Our commission revenue is primarily generated on our free-to-list option, in lieu of a pre-paid subscription fee. When a commissionable transaction is booked on our platform, we act as the merchant of record and receive cash from the traveler that includes both our commission, which is recorded as deferred revenue, and the amount due to the property owner, which is recorded to deferred merchant payables on our consolidated balance sheet. We pay the amount due to the property owner and recognize our commission revenue at the time of the traveler’s stay. Additional revenues are also derived on a pay-per-lead basis, as we provide leads for rental properties to property managers. Pay-per-lead revenue is billed and recognized in the period when the leads are delivered to the property managers. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of expenses that are directly related or closely correlated to revenue generation, including direct costs, such as ad serving fees, flight search fees, credit card fees and other transaction costs, and data center costs. In addition, cost of revenue includes personnel and overhead expenses, including salaries, benefits, stock-based compensation expense and bonuses for certain customer support personnel who are directly involved in revenue generation. |
Selling and Marketing | Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including traffic generation costs from SEM and other online traffic acquisition costs, syndication costs and affiliate program commissions, social media costs, brand advertising, television and other offline advertising, promotions and public relations. In addition, our sales and marketing expenses consist of indirect costs such as personnel and overhead expenses, including salaries, commissions, benefits, stock-based compensation expense and bonuses for sales, sales support, customer support and marketing employees. We incur advertising expense, which includes traffic generation costs from SEM and other online traffic costs, affiliate program commissions, display advertising, social media, and other online, and offline (including television) advertising expense, promotions and public relations to promote our brands. We expense the costs associated with communicating the advertisements in the period in which the advertisement takes place. We expense the production costs associated with advertisements in the period in which the advertisement first takes place. For the years ended December 31, 2017, 2016 and 2015, we recorded advertising expense of $629 million, $543 million, and $507 million, respectively, in selling and marketing expense on our consolidated statements of operations. As of both December 31, 2017 and 2016, we had $5 million of prepaid marketing expenses included in prepaid expenses and other current assets on our consolidated balance sheets. We expect to fully expense our prepaid marketing asset of $5 million as of December 31, 2017 to the consolidated statement of operations during 2018. |
Technology and Content | Technology and Content Technology and content expenses consist primarily of personnel and overhead expenses, including salaries and benefits, stock-based compensation expense and bonuses for salaried employees and contractors engaged in the design, development, testing, content support, and maintenance of our websites and mobile apps. Other costs include licensing, maintenance expense, computer supplies, telecom costs, content translation costs, and consulting costs. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including personnel engaged in executive leadership, finance, legal, and human resources, as well as stock-based compensation expense for those same personnel. General and administrative costs also include professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense, non-income taxes, such as sales, use and other non-income related taxes, and charitable contributions. |
Stock-Based Compensation | Stock-Based Compensation Stock Options. The exercise price for all stock options granted by us to date has been equal to the market price of the underlying shares of common stock at the date of grant. In this regard, when making stock option awards, our practice is to determine the applicable grant date and to specify that the exercise price shall be the closing price of our common stock on the date of grant. Our stock options generally have a term of ten years from the date of grant and typically vest equally over a four-year requisite service period. We amortize the grant-date fair value of our stock option grants as stock-based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. The estimated grant-date fair value of stock options is calculated using a Black-Scholes Merton option-pricing model (“Black-Scholes model”). The Black-Scholes model incorporates assumptions to fair value stock-based awards, which includes the risk-free rate of return, expected volatility, expected term and expected dividend yield. Our risk-free interest rate is based on the rates currently available on zero-coupon U.S. Treasury issues, in effect at the time of the grant, whose remaining maturity period most closely approximates the stock option’s expected term assumption. Our expected volatility is calculated by equally weighting the historical volatility and implied volatility on our own common stock. Historical volatility is determined using actual daily price observations of our common stock price over a period equivalent to or approximate to the expected term of our stock option grants to date. Implied volatility represents the volatility calculated from the observed prices of our actively traded options on our common stock, with remaining maturities in excess of six months and market prices approximate to the exercise prices of the stock option grant. We estimate our expected term using historical exercise behavior and expected post-vest termination data. Our expected dividend yield is zero, as we have not paid any dividends on our common stock to date and do not expect to pay any cash dividends for the foreseeable future. Restricted Stock Units. RSUs are stock awards that are granted to employees entitling the holder to shares of our common stock as the award vests. RSUs are measured at fair value based on the number of shares granted and the quoted price of our common stock at the date of grant. We amortize the fair value of RSUs as stock-based compensation expense over the vesting term, which is typically four years on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. Performance-Based Awards. Performance-based stock options and RSUs vest upon achievement of certain company-based performance conditions and a requisite service period. On the date of grant, the fair value of a performance-based award is calculated using the same method as our service based stock options and RSUs described above. We then assess whether it is probable that the individual performance targets would be achieved. If assessed as probable, compensation expense will be recorded for these awards over the estimated performance period. At each reporting period, we will reassess the probability of achieving the performance targets and the performance period required to meet those targets. The estimation of whether the performance targets will be achieved and of the performance period required to achieve the targets requires judgment, and to the extent actual results or updated estimates differ from our current estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized. The ultimate number of shares issued and the related compensation expense recognized will be based on a comparison of the final performance metrics to the specified targets. Market-based performance RSUs, or market-based RSUs, vest upon achievement of specified levels of market conditions. The fair value of our market-based RSUs is estimated at the date of grant using a Monte-Carlo simulation model. The probabilities of the actual number of market-based performance units expected to vest and resultant actual number of shares of common stock expected to be awarded are reflected in the grant date fair values; therefore, the compensation expense for these awards will be recognized assuming the requisite service period is rendered and are not adjusted based on the actual number of awards that ultimately vest. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive these awards, and subsequent events are not indicative of the reasonableness of our original estimates of fair value. The Company accounts for forfeitures in the period in which they occur, rather than estimate expected forfeitures. |
Income Taxes | Income Taxes We record income taxes under the asset and liability method. Deferred tax assets and liabilities reflect our estimation of the future tax consequences of temporary differences between the carrying amounts of assets and liabilities for book and tax purposes. We determine deferred income taxes based on the differences in accounting methods and timing between financial statement and income tax reporting. Accordingly, we determine the deferred tax asset or liability for each temporary difference based on the enacted tax rates expected to be in effect when we realize the underlying items of income and expense. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. We may establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. We classify deferred tax assets and liabilities as noncurrent on our consolidated balance sheet. We record liabilities to address uncertain tax positions we have taken in previously filed tax returns or that we expect to take in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that our tax position, based on technical merits, will be sustained upon examination. |
Cash and Cash Equivalents | Cash and Cash Equivalents Our cash consists of cash deposits held in global financial institutions. Our cash equivalents consist of highly liquid investments, including money market funds, with maturities of 90 days or less at the date of purchase. |
Short-term and Long-term Marketable Securities | Short-term and Long-term Marketable Securities We classify our marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited by policy to money market funds and mutual funds, as either a cash equivalent, short-term or long-term based on the nature of each security and its availability for use in current operations. As of December 31, 2017, our marketable securities have been classified and accounted for as available-for-sale, and therefore are carried at fair value, with the unrealized gains and losses, net of taxes, reported in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Fair values are determined for each individual security in the investment portfolio. We determine the appropriate classification of our marketable securities at the time of purchase and reevaluate the designations at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Realized gains and losses on the sale of marketable securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration, liquidity, and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years, according to our investment policy. We continually review our available for sale securities to determine whether a decline in fair value below the carrying value is other than temporary. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, and our intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s cost basis. Once a decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis in the investment is established. If we do not intend to sell the security, but it is probable that we will not collect all amounts due, then only the impairment due to the credit risk would be recognized in earnings and the remaining amount of the impairment would be recognized in accumulated other comprehensive loss within stockholders’ equity. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally due within 30 days and are recorded net of an allowance for doubtful accounts. We record accounts receivable at the invoiced amount. Collateral is not required for accounts receivable. For accounts outstanding longer than the contractual payment terms, we determine an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. The following table presents the changes in our allowance for doubtful accounts for the periods presented: December 31, 2017 2016 2015 (in millions) Allowance for doubtful accounts: Balance, beginning of period $ 9 $ 6 $ 7 Charges (recoveries) to earnings 8 4 3 Write-offs, net of recoveries and other adjustments (1 ) (1 ) (4 ) Balance, end of period $ 16 $ 9 $ 6 |
Derivative Financial Instruments | Derivative Financial Instruments Our goal in managing our foreign currency exchange risk is to reduce, to the extent practicable, our potential exposure to the changes that exchange rates might have on our earnings, cash flows and financial position. We do not use derivatives for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value. In certain circumstances, we enter into foreign currency forward exchange contracts (“forward contracts”) to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. Our derivative instruments, or forward contracts, that the Company has entered into to date have not been designated as hedges. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through current income. Monetary assets and liabilities denominated in a currency other than the functional currency of a given subsidiary are remeasured at spot rates in effect on the balance sheet date with the effects of changes in spot rates reported in interest income and other, net on our consolidated statements of operations. Accordingly, fair value changes in the forward contracts help mitigate the changes in the value of the remeasured assets and liabilities attributable to changes in foreign currency exchange rates, except to the extent of the spot-forward differences. These differences are not expected to be significant due to the short-term nature of the contracts, which to date, have had maturities at inception of 90 days or less. The net cash received or paid related to our derivative instruments are classified in other investing activities in our consolidated statements of cash flow. We had not entered into any cash flow, fair value or net investment hedges as of December 31, 2017. |
Property and Equipment, Including Website and Software Development Costs | Property and Equipment, Including Website and Software Development Costs We record property and equipment at cost, net of accumulated depreciation. We capitalize certain costs incurred during the application development stage related to the development of websites and internal use software when it is probable the project will be completed and the software will be used as intended. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. We expense costs related to the planning and post-implementation phases of software and website development as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment, capitalized software and website development, office furniture and other equipment. We depreciate leasehold improvements using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease. |
Leases | Leases We lease office space in many countries around the world under non-cancelable lease agreements. We generally lease our office facilities under operating lease agreements. Office facilities subject to an operating lease and the related lease payments are not recorded on our balance sheet. The terms of certain lease agreements provide for rental payments on a graduated basis, however, we recognize rent expense on a straight-line basis over the lease period in accordance with GAAP. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance under GAAP. If we continue to be the deemed owner, for accounting purposes, the facilities are accounted for as financing obligations. We also establish assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition for asset retirement obligations. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs and are included in other long-term liabilities on our consolidated balance sheet. Our asset retirement obligations were not material as of December 31, 2017 and December 31, 2016, respectively. |
Business Combinations | Business Combinations We account for acquired businesses using the acquisition method of accounting which requires that the tangible assets and identifiable intangible assets acquired and assumed liabilities be recorded at the date of acquisition at their respective fair values. Any excess purchase price over the estimated fair value of the net tangible and intangible assets acquired is allocated to goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer and supplier relationships, acquired technology and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Valuations are performed by management or third party valuation specialists under management's supervision, where appropriate. Any changes to provisional amounts identified during the measurement period, calculated as if the accounting had been completed as of the acquisition date, are recognized in the consolidated statement of operations in the reporting period in which the adjustment amounts are determined. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill We assess goodwill, which is not amortized, for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of the reporting unit as a whole is available to support the recoverability of its goodwill. The Company has the option to qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In the evaluation of goodwill for impairment, we generally first perform a qualitative assessment to determine whether it is more likely than not (i.e., a likelihood of more than 50%) that the estimated fair value of the reporting unit is less than the carrying amount. Periodically, we may choose to forgo the initial qualitative assessment and proceed directly to a quantitative analysis to assist in our annual evaluation. When assessing goodwill for impairment, our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, such as the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, and the amount of time in between quantitative fair value assessments and the date of acquisition to establish an updated baseline quantitative analysis. During a qualitative assessment, if we determine that it is not more likely than not that the implied fair value of the goodwill is less than its carrying amount, no further testing is necessary. If, however, we determine that it is more likely than not that the implied fair value of the goodwill is less than its carrying amount, we then perform a quantitative assessment and compare the estimated fair value of the reporting unit to the carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, the goodwill impairment is measured using the difference between the carrying value and the fair value of the reporting unit, however, any loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. In determining the estimated fair values of reporting units in a quantitative goodwill impairment test, we generally use a blend, of the following recognized valuation methods: the income approach (discounted cash flows model) and the market valuation approach, which we believe compensates for the inherent risks of using either model on a stand-alone basis. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: weighted average cost of capital; long-term rate of growth and profitability of the reporting unit; income tax rates and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison to comparable publicly traded firms in similar lines of business and other precedent transactions. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and/or income multiples in estimating the fair value of the reporting units. Valuations are performed by management or third party valuation specialists under management's supervision, where appropriate. We believe that the estimated fair values assigned to our reporting units in impairment tests are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ from those estimates. The use of different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge. During the Company's annual goodwill impairment test during the fourth quarter of 2017, a qualitative assessment for all our reporting units' goodwill was performed. For fiscal year 2017, we determined the fair value of all our reporting units were significantly in excess of their carrying values. Accordingly, we did not recognize any impairment charges during the year ending December 31, 2017. As part of our qualitative assessment for our 2017 goodwill impairment analysis of our reporting units, the factors that we considered included, but were not limited to: (a) changes in macroeconomic conditions in the overall economy and the specific markets in which we operate, (b) our ability to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) evaluation of current and future forecasted financial results of the reporting units, (f) comparison of our current financial performance to historical and budgeted results of the reporting units, (g) change in excess of the Company’s market capitalization over its book value, factoring in the decline in the Company’s stock price during 2017, (h) changes in estimates, valuation inputs, and/or assumptions since the last quantitative analysis of the reporting units, (i) changes in the regulatory environment; and (j) changes in strategic outlook or organizational structure and leadership of the reporting units, and how these factors might impact specific performance in future periods. However, as we periodically reassess estimated future cash flows and asset fair values, changes in our estimates and assumptions may cause us to realize material impairment charges in the future. Intangible Assets Intangible assets with estimable useful lives, or definite-live intangibles, are carried at cost and are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment upon certain triggering events. We routinely review the remaining estimated useful lives of definite-lived intangible assets. If we reduce the estimated useful life assumption, the remaining unamortized balance is amortized over the revised estimated useful life. Intangible assets that have indefinite lives are not amortized and are tested for impairment annually during the fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Similar to the qualitative assessment for goodwill, we may assess qualitative factors to determine if it is more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount. If we determine that it is not more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount, no further testing is necessary. If, however, we determine that it is more likely than not that the implied fair value of the indefinite-lived intangible asset is less than its carrying amount, we compare the implied fair value of the indefinite-lived asset with its carrying amount. If the carrying value of an individual indefinite-lived intangible asset exceeds its implied fair value, the individual asset is written down by an amount equal to such excess. The assessment of qualitative factors is optional and at our discretion. We may bypass the qualitative assessment for any indefinite-lived intangible asset in any period and resume performing the qualitative assessment in any subsequent period. We base our measurement of fair value of indefinite-lived intangible assets, using the relief-from-royalty method. This method assumes that the trade name and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate future revenues, the appropriate royalty rate and the weighted average cost of capital, however, such assumptions are inherently uncertain and actual results could differ from those estimates. The use of different assumptions, estimates or judgments could trigger the need for an impairment charge, or materially increase or decrease the amount of any such impairment charge. The carrying value of indefinite-lived intangible assets that is subject to annual assessment for impairment is $30 million at December 31, 2017 and consists of trademarks and tradenames. During the Company's annual indefinite-lived intangible impairment test during the fourth quarter of 2017, a qualitative assessment was performed. As part of our qualitative assessment we considered, amongst other factors, the amount of excess fair value of our trade names and trademarks to the carrying value of those same assets, using the results of our most recent quantitative assessment, while also considering changes in estimates and/or valuation input assumptions since the last quantitative analysis. After considering these factors and the impact that changes in such factors would have on the inputs used in our previous quantitative assessment, we determined that it was more likely than not that our indefinite-lived intangible assets were not impaired as of December 31, 2017. Impairment of Long-Lived Assets We periodically review the carrying amount of our definite-lived intangible assets and other long term assets, including property and equipment and website and internal use software, to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, we assess the recoverability of the asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset of the group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, we will estimate the fair value of the asset group using appropriate valuation methodologies which would typically include an estimate of discounted cash flows, using an appropriate discount rate. Any impairment would be measured by the amount that the carrying values, of such asset groups, exceed their fair value and would be included in operating income on the consolidated statement of operations. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. We have not identified any circumstances that would warrant an impairment charge for any recorded definite lived or other long term assets on our consolidated balance sheet at December 31, 2017. |
Deferred Merchant Payables | Deferred Merchant Payables In our Vacation Rentals free-to-list model and our Attractions businesses, we receive cash from travelers at the time of booking and we record these amounts, net of commissions, on our consolidated balance sheets as deferred merchant payables. We pay the suppliers, or the vacation rental owners and tour providers, respectively, after the travelers’ use. Therefore, we receive cash from the traveler prior to paying the supplier and this operating cycle represents a working capital source or use of cash to us. Our deferred merchant payables balance was $156 million and $128 million at December 31, 2017 and 2016, respectively, on our consolidated balance sheets. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses Our consolidated financial statements are reported in U.S. dollars. Certain of our subsidiaries outside of the United States use the related local currency as their functional currency and not the U.S. dollar. Therefore assets and liabilities of our foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity on our consolidated balance sheet. We also have subsidiaries that have transactions in foreign currencies other than their functional currency. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in our consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded net foreign currency exchange gains of $1 million and losses of $4 million and $4 million for the years ended December 31, 2017, 2016 and 2015, respectively, in interest income and other, net on our consolidated statement of operations. These amounts also include transaction gains and losses, both realized and unrealized from forward contracts. |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We measure assets and liabilities at fair value based on the expected exit price, which is the amount that would be received on the sale of an asset or amount paid to transfer a liability, as the case may be, in an orderly transaction between market participants in the principal or most advantageous market in which we would transact. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability at the measurement date. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. GAAP provides the following hierarchical levels of inputs used to measure fair value: Level 1—Valuations are based on quoted market prices for identical assets and liabilities in active markets. Level 2—Valuations are based on observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations are based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. |
Certain Risks and Concentrations | Certain Risks and Concentrations Our business is subject to certain risks and concentrations, including concentration related to dependence on our relationships with our customers. For the years ended December 31, 2017, 2016 and 2015 our two most significant travel partners, Expedia (and its subsidiaries) and Priceline (and its subsidiaries), each accounted for more than 10% of our consolidated revenue and combined accounted for 43%, 46% and 46%, respectively, of our consolidated revenue. Nearly all of this concentration of revenue is recorded in our Hotel segment for these reporting periods. Refer to “Note 17 – Segment and Geographic Information” Financial instruments, which potentially subject us to concentration of credit risk, consist primarily of cash and cash equivalents, corporate debt securities, foreign currency exchange contracts, and accounts receivable. We maintain some cash and cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance limits. Our cash and cash equivalents are primarily composed of bank account balances with financial institutions primarily denominated in U.S. dollars, Euros, British pound sterling, and Australian dollars, as well as, money market funds. We invest in highly-rated corporate debt securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. Our credit risk related to corporate debt securities is also mitigated by the relatively short maturity period required by our investment policy. Foreign currency exchange contracts are transacted with various international financial institutions with high credit standings, which to date, have had maturities of less than 90 days. Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period. |
Contingent Liabilities | Contingent Liabilities 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 disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment may be required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
Treasury Stock | Treasury Stock Shares of our common stock repurchased are recorded at cost as treasury stock and result in the reduction of stockholders' equity in our consolidated balance sheet. We may reissue these treasury shares. When treasury shares are reissued, we use the average cost method for determining the cost of reissued shares. If the issuance price is higher than the cost, the excess of the issuance price over the cost is credited to additional paid-in-capital. If the issuance price is lower than the cost, the difference is first charged against any credit balance in additional paid-in-capital from the previous issuances of treasury stock and the remaining balance is charged to retained earnings. |
Earnings Per Share (“EPS”) | Earnings Per Share (“EPS”) We compute basic earnings per share by dividing net income by the weighted average number of common and Class B common shares outstanding during the period. Diluted earnings per share 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 earnings per share by dividing net income by the sum of the weighted average number of common and common equivalent shares outstanding during the period. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an antidilutive effect. For additional information on how we compute EPS, see Note 5 — Earnings Per Share |
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 will adopt this new guidance on January 1, 2018. 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 the new guidance 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 is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted including adoption in any 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 will adopt this new guidance on January 1, 2018. Upon adoption, the new guidance will impact how we assess any prospective acquisitions (or disposals) of assets or businesses. 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. We will adopt this new guidance on January 1, 2018 and apply it retrospectively to all prior periods presented in the financial statements as required under the new guidance. We do not expect a material impact on our consolidated financial statements and related disclosures upon the adoption of this new guidance. 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 our adoption of this new guidance on January 1, 2018, we are required to 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, which we do not expect to be material to 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 will adopt this new guidance on January 1, 2018 and we do not expect this new guidance 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 are in the process of 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 are identified. We are also in the process of implementing additional lease software to support our accounting and reporting process, including the new quantitative and qualitative financial disclosure requirements. In addition, we are evaluating the impact of the system implementation and new accounting guidance on our internal controls. We will continue to provide updates of our assessment of the effect, that this new lease guidance will have on our consolidated financial statements, disclosures, systems and related internal controls, and will disclose any material effects, if any, when known. 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 at 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. We will adopt this new guidance on January 1, 2018 on a modified retrospective basis, which requires an entity to recognize the cumulative effect of adopting this guidance as an adjustment to the opening balance of retained earnings, which we do not expect to be material. We also do not expect a material impact on our consolidated financial statements and related disclosures upon the adoption of this new guidance. 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 addition, the FASB has also issued several amendments to the standard, which clarify certain aspects of the guidance, including principal versus agent considerations and identifying performance obligations. 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 will adopt this new guidance on January 1, 2018 under the modified retrospective method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of retained earnings. We do not expect this adjustment to be material. Prior periods will not be retrospectively adjusted, however, revenues for 2018 will be reported on the new basis and also disclosed on the historical basis. We have evaluated our revenue streams and based on the Company's analysis; the adoption of this new revenue guidance will result primarily in immaterial timing changes in recognition of revenue to certain revenue streams, such as for our instant booking revenue recorded under the consumption model, which will be recognized at the transaction booking date for a hotel accommodation rather than upon completion of the stay by the traveler. We expect the adoption of this new revenue standard will not have a material impact, either on an annual or quarterly basis, to our consolidated financial statements on a go-forward basis. Our systems and internal controls were not significantly impacted related to the identified accounting changes. While we have made the necessary changes to our accounting policies and internal processes to support the new revenue recognition standard, we are continuing our assessment of potential changes to our disclosures under the new guidance. Recently Adopted On December 22, 2017, the SEC published Staff Accounting Bulletin (SAB) No. 118, which expresses views of the staff regarding application of FASB Accounting Standards Codification (“ASC”) Topic 740, Income Taxes Income Taxes” 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, quantitative 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 early adopted this new guidance in the fourth quarter of 2017. The adoption of this new guidance had no impact on our annual goodwill impairment analysis, or on our consolidated financial statements and related disclosures. 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. |
Significant Accounting Polici30
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Changes in the Allowance for Doubtful Accounts | The following table presents the changes in our allowance for doubtful accounts for the periods presented: December 31, 2017 2016 2015 (in millions) Allowance for doubtful accounts: Balance, beginning of period $ 9 $ 6 $ 7 Charges (recoveries) to earnings 8 4 3 Write-offs, net of recoveries and other adjustments (1 ) (1 ) (4 ) Balance, end of period $ 16 $ 9 $ 6 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
2016 Acquisitions | |
Business Acquisition [Line Items] | |
Summary of Aggregate Purchase Price Consideration Allocated to Fair Value of Assets Acquired and Liabilities Assumed | The aggregate purchase price consideration of $34 million was allocated to the fair value of assets acquired and liabilities assumed. The following summarizes the final allocation, in millions: Total Goodwill (1) $ 17 Intangible assets (2) 25 Net tangible assets (liabilities) (3) (8 ) Total purchase price consideration (4) $ 34 (1) Goodwill is not deductible for tax purposes. (2) Identifiable definite-lived intangible assets acquired during 2016 were comprised of trade names of $4 million with a weighted average life of 10 years, customer lists and supplier relationships of $4 million with a weighted average life of 6 years, subscriber relationships of $5 million with a weighted average life of approximately 7 years, and technology and other of $12 million with a weighted average life of approximately 5 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2016 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. (3) Primarily includes cash acquired of $4 million, accounts receivable of $2 million, and liabilities assumed, including accrued expenses and deferred merchant payables of $3 million and $10 million, respectively, which reflect their respective fair values at acquisition. (4) Subject to adjustment based on indemnification obligations for general representations and warranties of certain acquired company stockholders. |
2015 Acquisitions | |
Business Acquisition [Line Items] | |
Summary of Aggregate Purchase Price Consideration Allocated to Fair Value of Assets Acquired and Liabilities Assumed | The aggregate purchase price consideration of $28 million was allocated to the fair value of assets acquired and liabilities. The following summarizes the final allocation, in millions: Total Goodwill (1) $ 17 Intangible assets (2) 12 Net tangible assets (liabilities) 1 Deferred tax liabilities, net (2 ) Total purchase price consideration $ 28 (1) Goodwill is not deductible for tax purposes. (2) Identifiable definite-lived intangible assets acquired during 2015 were comprised of trade names of $2 million with a weighted average life of approximately 10 years, customer lists and supplier relationships of $7 million with a weighted average life of approximately 6 years and technology and other of $3 million with a weighted average life of approximately 2 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2015 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. |
Stock Based Awards and Other 32
Stock Based Awards and Other Equity Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs | The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and RSUs, on our consolidated statements of operations during the periods presented: Year ended December 31, 2017 2016 2015 (in millions) Selling and marketing $ 21 $ 20 $ 16 Technology and content 40 40 28 General and administrative 35 25 28 Total stock-based compensation expense 96 85 72 Income tax benefit from stock-based compensation expense (28 ) (31 ) (26 ) Total stock-based compensation expense, net of tax effect $ 68 $ 54 $ 46 |
Summary of Stock Option Activity | A summary of our stock option activity is presented below: 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) 2,333 40.03 Exercised (2) (496 ) 29.37 Cancelled or expired (802 ) 65.13 Options outstanding as of December 31, 2017 6,853 $ 52.78 6.5 $ 3 Exercisable as of December 31, 2017 3,340 $ 52.69 4.4 $ 3 Vested and expected to vest after December 31, 2017 (3) 6,853 $ 52.78 6.5 $ 3 (1) Inclusive of 780,000 stock options awarded to our Chief Executive Officer and President, or CEO, during November 2017. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $17.33. These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. (2) Inclusive of 294,410 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 which 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 consolidated statements of cash flows. (3) 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: December 31, 2017 2016 2015 Risk free interest rate 2.02 % 1.20 % 1.58 % Expected term (in years) 6.13 4.85 5.42 Expected volatility 42.14 % 41.81 % 41.79 % Expected dividend yield — % — % — % |
Summary of RSU Activity, Including Service Based Awards and Performance-Based Awards | A summary of our RSU activity, including service based awards and performance-based awards, is presented below: 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 (1)(2) 5,042 41.09 Vested and released (3) (1,030 ) 67.25 Cancelled (853 ) 52.64 Unvested RSUs outstanding as of December 31, 2017 6,015 $ 48.14 $ 207 Expected to vest after December 31, 2017 (4) 6,015 $ 48.14 $ 207 (1) Includes the following RSU grants awarded to our CEO, during November 2017: 1) 426,000 service-based RSUs; and 2) 213,000 market-based RSUs. The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $34.71. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of these awards, or $30.04 per RSU. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through December 31, 2020. Based upon actual attainment relative to the target performance metric, the CEO has the ability to receive up to 125% of the target number of market-based RSUs originally granted, or to be issued none at all. (2) Excludes a performance-based RSU grant for 213,000 shares awarded to our CEO during November 2017. This award provides for vesting based on the extent to which the Company achieves certain financial and/or the CEO achieves certain strategic performance metrics relative to the targets to be established by the Company’s Compensation Committee. One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. The estimated grant-date fair value per RSU will be calculated upon the establishment of annual performance targets and each tranche will be amortized on a straight-line basis over its requisite service period. At any point in time during the vesting period, the award’s expense to date will at least equal the portion of the grant-date fair value that is expected to vest at that date. Based upon actual attainment relative to the target performance metrics, the CEO has the ability to receive up to 125% of the target number originally granted, or to be issued none at all. (3) Inclusive of 301,932 RSUs withheld to satisfy required employee tax withholding requirements due to net share settlement. 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 consolidated statements of cash flows. (4 ) 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, respectively. |
Summary of Unrecognized Compensation Expense and Weighted Average Period Remaining | A summary of our remaining unrecognized compensation expense and the weighted average remaining amortization period at December 31, 2017 related to our non-vested stock options and RSU awards is presented below (in millions, except in years information): Stock Options RSUs Unrecognized compensation expense $ 52 $ 222 Weighted average period remaining (in years) 2.9 3.0 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 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: Year ended December 31, 2017 2016 2015 Numerator: Net income (loss) $ (19 ) $ 120 $ 198 Denominator: Weighted average shares used to compute Basic EPS 140,445 145,443 143,836 Weighted average effect of dilutive securities: Stock options - 1,129 1,839 RSUs - 321 292 Weighted average shares used to compute Diluted EPS 140,445 146,893 145,967 Basic EPS $ (0.14 ) $ 0.83 $ 1.38 Diluted EPS $ (0.14 ) $ 0.82 $ 1.36 |
Financial Instruments and Fai34
Financial Instruments and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 fair value hierarchy and significant investment category recorded as cash and cash equivalents or short and long-term marketable securities as of the dates presented (in millions): December 31, 2017 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash $ 663 $ — $ — $ 663 $ 663 $ — $ — Level 1: Money market funds 1 — — 1 1 — — Level 2: U.S. agency securities 11 — — 11 — 6 5 U.S. treasury securities 1 — — 1 — 1 — Certificates of deposit 2 — — 2 — 2 — Commercial paper 11 — — 11 9 2 — Corporate debt securities 46 — — 46 — 24 22 Subtotal 71 — — 71 9 35 27 Total $ 735 $ — $ — $ 735 $ 673 $ 35 $ 27 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 for the periods presented: December 31, 2017 December 31, 2016 (in millions) Foreign currency exchange-forward contracts (1)(2) $ — $ 6 (1) Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had no outstanding derivative contracts as of December 31, 2017 and two outstanding derivative contracts as of December 31, 2016. (2) The fair value of our outstanding derivatives as of December 31, 2016 was not material and was reported as an asset in prepaid expenses and other current assets on our consolidated balance sheet. 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. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment consists of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Capitalized software and website development $ 213 $ 153 Building (1) 123 123 Leasehold improvements 39 39 Computer equipment and purchased software 46 37 Furniture, office equipment and other 19 19 440 371 Less: accumulated depreciation (177 ) (111 ) Total $ 263 $ 260 (1) The Company is deemed for accounting purposes to be the owner of its corporate headquarters building under GAAP, and depreciates the asset over its estimated useful life of 40 years on a straight-line basis. Refer to “Note 13 – Commitments and Contingencies |
Goodwill and Intangible Asset36
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | The following table summarizes our goodwill activity by reportable segment for the periods presented: Hotel Non-Hotel Consolidated (in millions) Balance as of December 31, 2015 $ 442 $ 290 $ 732 Acquisitions (1) 10 7 17 Other adjustments (2) (1 ) (12 ) (13 ) Balance as of December 31, 2016 $ 451 $ 285 $ 736 Other adjustments (2) - 22 22 Balance as of December 31, 2017 $ 451 $ 307 $ 758 (1) The additions to goodwill relate to our business acquisitions. Refer to “Note 3— Acquisitions and Dispositions (2) Primarily related to impact of changes in foreign currency exchange rates to goodwill. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets, which were acquired in business combinations and recorded at fair value on the date of purchase, consist of the following for the periods presented: December 31, 2017 2016 (in millions) Intangible assets with definite lives $ 224 $ 217 Less: accumulated amortization (112 ) (80 ) Intangible assets with definite lives, net 112 137 Intangible assets with indefinite lives 30 30 Total $ 142 $ 167 |
Components of Intangible Assets with Definite Lives | The following table presents the components of our intangible assets with definite lives for the periods presented: December 31, 2017 December 31, 2016 Weighted Average Gross Net Gross Net Remaining Life Carrying Accumulated Carrying Carrying Accumulated Carrying (in years) Amount Amortization Amount Amount Amortization Amount (in millions) (in millions) Trade names and trademarks 6.8 $ 58 $ (20 ) $ 38 $ 56 $ (14 ) $ 42 Customer lists and supplier relationships 3.6 87 (43 ) 44 84 (31 ) 53 Subscriber relationships 4.3 35 (22 ) 13 33 (15 ) 18 Technology and other 2.6 44 (27 ) 17 44 (20 ) 24 Total 4.6 $ 224 $ (112 ) $ 112 $ 217 $ (80 ) $ 137 |
Summary of Estimated Future Amortization Expense Related to Intangible Assets with Definite Lives | Our definite-lived intangible assets are being amortized on a straight-line basis. The straight-line method of amortization is currently our best estimate, or approximates to date, the distribution of the economic use of these intangible assets. The estimated amortization expense for intangible assets with definite lives for each of the next five years, and the expense thereafter, assuming no subsequent impairment of the underlying assets or change in estimate of remaining lives, is expected to be as follows (in millions): 2018 $ 31 2019 27 2020 22 2021 14 2022 7 2023 and thereafter 11 Total $ 112 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | The Company’s outstanding debt consisted of the following for the periods presented: December 31, December 31, 2017 2016 (in millions) Short-Term Debt: Chinese Credit Facilities $ 7 $ 7 2016 Credit Facility - 73 Total Short-Term Debt (1) $ 7 $ 80 Long-Term Debt: 2015 Credit Facility $ 230 $ 91 Total Long-Term Debt $ 230 $ 91 (1) The weighted-average interest rate on short-term debt was 5.0% as of December 31, 2017 and 2.1% as of December 31, 2016. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Our Domestic and Foreign Income Before Income Taxes | The following table presents a summary of our domestic and foreign income before income taxes: Year Ended December 31, 2017 2016 2015 (in millions) Domestic $ 81 $ 64 $ 67 Foreign 29 87 172 Total $ 110 $ 151 $ 239 |
Summary of the Components of Our Provision for Income Taxes | The following table presents a summary of the components of our provision for income taxes: Year Ended December 31, 2017 2016 2015 (in millions) Current income tax expense: Federal $ 93 $ 38 $ 48 State 1 2 8 Foreign 6 11 22 Current income tax expense 100 51 78 Deferred income tax expense (benefit): Federal 25 (12 ) (29 ) State 2 (3 ) (2 ) Foreign 2 (5 ) (6 ) Deferred income tax expense (benefit): 29 (20 ) (37 ) Provision for income taxes $ 129 $ 31 $ 41 |
Summary of Deferred Tax Assets and Deferred Tax Liabilities | The Company reduced its current income tax payable by $27 million, $21 million and $63 million for the years ended December 31, 2017, 2016 and 2015, respectively, for tax deductions attributable to the exercise or settlement of the Company’s stock-based awards. The significant components of our deferred tax assets and deferred tax liabilities as of December 31, 2017 and 2016 are as follows: December 31, 2017 2016 (in millions) Deferred tax assets: Stock-based compensation $ 36 $ 52 Net operating loss carryforwards 56 46 Provision for accrued expenses 4 12 Deferred rent 3 5 Lease financing obligation 22 33 Foreign advertising spend 13 10 Deferred expense related to cost-sharing arrangement 26 30 Interest carryforward 7 — Charitable contribution carryforward — 20 Other 7 7 Total deferred tax assets $ 174 $ 215 Less: valuation allowance (55 ) (27 ) Net deferred tax assets $ 119 $ 188 Deferred tax liabilities: Intangible assets $ (59 ) $ (83 ) Property and equipment (21 ) (28 ) Prepaid expenses (4 ) (6 ) Building - corporate headquarters (20 ) (31 ) Deferred income related to cost-sharing arrangement (13 ) (10 ) Total deferred tax liabilities $ (117 ) $ (158 ) Net deferred tax asset (liability) $ 2 $ 30 |
Reconciliation of the Provision for Income Taxes | A reconciliation of the provision for income taxes to the amounts computed by applying the statutory federal income tax rate to income before income taxes is as follows: Year Ended December 31, 2017 2016 2015 (in millions) Income tax expense at the federal statutory rate of 35% $ 38 $ 53 $ 84 Foreign rate differential (25 ) (35 ) (53 ) State income taxes, net of effect of federal tax benefit 5 4 4 Unrecognized tax benefits and related interest 12 11 12 Change in cost-sharing treatment of stock-based compensation (5 ) (6 ) (13 ) Non-deductible transaction costs — — 1 Impacts related to the 2017 Tax Act 73 — — Research tax credit (8 ) (10 ) (3 ) Stock-based compensation 13 2 2 Change in valuation allowance 25 9 5 Other, net 1 3 2 Provision for income taxes $ 129 $ 31 $ 41 |
Reconciliation of the Beginning and Ending Amount of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (excluding interest and penalties) is as follows: December 31, 2017 2016 2015 (in millions) Balance, beginning of year $ 105 $ 89 $ 67 Increases to tax positions related to the current year 17 16 15 Increases to tax positions related to the prior year 1 1 7 Reductions due to lapsed statute of limitations — (1 ) — Decreases to tax positions related to the prior year — — — Settlements during current year — — — Balance, end of year $ 123 $ 105 $ 89 |
Accrued Expenses and Other Cu39
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Details of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Accrued employee salary, bonus, and related benefits $ 60 $ 53 Accrued marketing costs 39 37 Other 37 37 Total $ 136 $ 127 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Noncurrent [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following for the periods presented: December 31, 2017 December 31, 2016 (in millions) Unrecognized tax benefits (1) $ 127 $ 108 Long-term income taxes payable (2) 61 $ - Financing obligation, net of current portion (3) 84 84 Other (4) 21 18 Total $ 293 $ 210 (1) Refer to “Note 10— Income Taxes (2) Amount relates to the long-term portion of Transition Tax related to 2017 Tax Act at December 31, 2017. Refer to “Note 10 – Income Taxes (3) Refer to “Note 13 – Commitments and Contingencies (4) Amounts primarily consist of long-term deferred rent balances related to our operating leases for office space. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Material Commitments and Obligations | The following table summarizes our material commitments and obligations as of December 31, 2017: By Period Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years (in millions) Property leases, net of sublease income (1) $ 228 $ 28 $ 53 $ 51 $ 96 Expected interest and commitment fee payments on 2015 Credit Facility (2) 34 7 16 11 — Total (3) $ 262 $ 35 $ 69 $ 62 $ 96 (1) Estimated future minimum rental payments under operating leases with non-cancelable lease terms, including our corporate headquarters lease in Needham, MA. (2) Expected interest payments on the 2015 Credit Facility are based on the effective interest rate and outstanding borrowings as of December 31, 2017, but could change significantly in the future. Amounts assume that our existing debt is repaid at the end of the credit agreement and do not assume additional borrowings or refinancing of existing debt. Expected commitment fee payments are based on the unused portion of credit facility, issued letters of credit, and current effective commitment fee rate as of December 31, 2017; however, these variables could change significantly in the future. Refer to “Note 9— Debt Subsequent Events (3) Excluded from the table was $127 million of unrecognized tax benefits, including accrued interest, that we have recorded in other long-term liabilities on our consolidated balance sheet for which we cannot make a reasonably reliable estimate of the amount and period of payment. We do not anticipate any material changes in the next year. Also excluded from the table was $61 million of estimated Transition Tax related to 2017 Tax Act recorded in long-term liabilities on the consolidated balance sheet at December 31, 2017, that we believe the majority will be paid more than five years from December 31, 2017. Refer to “Note 10 – Income Taxes |
Future Minimum Commitments Under Our Corporate Headquarters Lease and Other Non-Cancelable Operating Leases | As of December 31, 2017 Year Corporate Headquarters Lease (1) Other Operating Leases Sublease Income Total Lease Commitments (Net of Sublease Income) (in millions) 2018 $ 9 $ 22 $ (3 ) $ 28 2019 9 21 (3 ) 27 2020 9 19 (2 ) 26 2021 10 17 (2 ) 25 2022 10 17 (1 ) 26 Thereafter 77 19 — 96 Total $ 124 $ 115 $ (11 ) $ 228 (1) Amount includes an $84 million financing obligation, which we have recorded in other long-term liabilities on our consolidated balance sheet at December 31, 2017, related to our corporate headquarters lease. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss Primarily Comprised of Accumulated Foreign Currency Translation Adjustments | Accumulated other comprehensive loss is primarily comprised of accumulated foreign currency translation adjustments, as follows for the periods presented: December 31, 2017 December 31, 2016 (in millions) Cumulative foreign currency translation adjustments (1) $ (42 ) $ (77 ) Total accumulated other comprehensive loss (2) $ (42 ) $ (77 ) (1) Due to our intention to indefinitely reinvest foreign subsidiary earnings; deferred taxes are not provided on foreign currency translation adjustments. (2) Our accumulated net unrealized gain (loss) on available for sale securities was not material as of December 31, 2017 and December 31, 2016. |
Segment and Geographic Inform43
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Year ended December 31, 2017 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,196 $ 360 $ — $ 1,556 Adjusted EBITDA (1) 286 45 — 331 Depreciation (79 ) (79 ) Amortization of intangible assets (32 ) (32 ) Stock-based compensation (96 ) (96 ) Operating income 124 Other expense, net (14 ) Income before income taxes 110 Provision for income taxes (2) (129 ) Net loss $ (19 ) Year ended December 31, 2016 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,190 $ 290 $ — $ 1,480 Adjusted EBITDA (1) 380 (28 ) — 352 Depreciation (69 ) (69 ) Amortization of intangible assets (32 ) (32 ) Stock-based compensation (85 ) (85 ) Operating income 166 Other expense, net (15 ) Income before income taxes 151 Provision for income taxes (31 ) Net income $ 120 Year ended December 31, 2015 Hotel Non-Hotel Corporate and unallocated Total (in millions) Revenue $ 1,263 $ 229 $ — $ 1,492 Adjusted EBITDA (1) 472 (6 ) — 466 Depreciation (57 ) (57 ) Amortization of intangible assets (36 ) (36 ) Stock-based compensation (72 ) (72 ) Non-cash charitable contribution (3) (67 ) (67 ) Other non-recurring expenses (2 ) (2 ) Operating income 232 Other income, net 7 Income before income taxes 239 Provision for income taxes (41 ) Net income $ 198 (1) Includes allocated general and administrative expenses in our Hotel segment of $81 million, $80 million and $85 million; and in our Non-Hotel segment of $42 million, $38 million and $28 million for the years ended December 31, 2017, 2016 and 2015, respectively. (2) The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” (3) During the fourth quarter of 2015, we incurred an expense in the amount of $67 million to reflect a non-cash contribution to The TripAdvisor Charitable Foundation (the “Foundation”), which was recorded to general and administrative expense in our consolidated statement of operations. TripAdvisor had historically funded 2% of its annual operating income before amortization and stock-based compensation. TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount equal to eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under its pledge agreement in December 2015. We settled this obligation in treasury shares based on the fair value of our common stock on the date the treasury shares were issued to the Foundation and therefore given the use of stock to settle the obligation, the amount has been excluded from Adjusted EBITDA. TripAdvisor does not expect to make any future contributions to the Foundation. |
Summary of Total Revenue by Source | The following table presents revenue by source for the periods presented: Year ended December 31, 2017 2016 2015 (in millions) TripAdvisor-branded click-based and transaction $ 756 $ 750 $ 837 TripAdvisor-branded display-based advertising and subscription 292 282 272 Other hotel revenue 148 158 154 Non-hotel revenue 360 290 229 Total revenue $ 1,556 $ 1,480 $ 1,492 |
Summary of Revenue by Geographic Area | The following table presents revenue by geographic area, the United States, the United Kingdom and all other countries, based on the geographic location of our websites for the periods presented: Year ended December 31, 2017 2016 2015 (in millions) Revenue United States $ 877 $ 799 $ 739 United Kingdom 209 210 215 All other countries 470 471 538 Total revenue $ 1,556 $ 1,480 $ 1,492 |
Property and Equipment, Net | The following table presents property and equipment, net for the United States and all other countries based on the geographic location of the assets for the periods presented: December 31, 2017 2016 (in millions) Property and equipment, net United States $ 219 $ 222 All other countries 44 38 Total $ 263 $ 260 |
Interest Income and Other, Net
Interest Income and Other, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Income And Expenses [Abstract] | |
Summary of Interest Income and Other, Net | The following table presents the detail of interest income and other, net, for the periods presented: Year Ended December 31, 2017 2016 2015 (in millions) Net gain (loss), realized and unrealized, on foreign currency exchange and foreign currency derivative contracts and other, net $ 2 $ (4 ) $ (4 ) Interest income 1 1 1 Loss on cost method investment (2 ) — — Gain on sale of business (1) — — 20 Total $ 1 $ (3 ) $ 17 (1) Refer to “Note 3 – Acquisitions and Dispositions |
Quarterly Financial Informati45
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table presents selected unaudited financial information for the eight quarters in the period ended December 31, 2017. The results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period to period comparisons should not be relied upon as an indication of future performance. Three Months Ended March 31 June 30 September 30 December 31 (in millions, except per share data) Year ended December 31, 2017 Revenue $ 372 $ 424 $ 439 $ 321 Operating income 27 46 42 9 Net income (loss) (1) 13 27 25 (84 ) Basic earnings (loss) per share (2) $ 0.09 $ 0.19 $ 0.18 $ (0.60 ) Diluted earnings (loss) per share (2) $ 0.09 $ 0.19 $ 0.18 $ (0.60 ) Year ended December 31, 2016 Revenue $ 352 $ 391 $ 421 $ 316 Operating income 42 47 66 10 Net income 29 34 55 1 Basic earnings per share (2) $ 0.20 $ 0.23 $ 0.38 $ 0.01 Diluted earnings per share (2) $ 0.20 $ 0.23 $ 0.37 $ 0.01 (1) (2) During the fourth quarter of 2017, we recognized $67 million of Transition Tax and $6 million of tax expense recorded for the remeasurement of our net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share may not equal the total computed for the year. |
Organization and Business Des46
Organization and Business Description - Additional Information (Details) shares in Millions, Restaurant in Millions, Hotel in Millions | Dec. 11, 2012shares | Dec. 31, 2017Vote / sharesMarketLanguageBrandHotelVacationRentalRestaurantActivityandAttractionshares |
Description Of Business And Basis Of Presentation [Line Items] | ||
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 | |
Description of user-generated reviews and opinions across broad base of global travel-related businesses | TripAdvisor-branded websites include tripadvisor.com in the United States and localized versions of the website in 48 markets worldwide and 28 languages worldwide. TripAdvisor features approximately 600 million reviews and opinions on approximately 7.5 million places to stay, places to eat and things to do – including approximately 1.2 million hotels, inns, B&Bs and specialty lodging and 750,000 vacation rentals, 4.6 million restaurants and 915,000 activities and attractions worldwide. | |
Number of hotels and accommodations | Hotel | 1.2 | |
Number of vacation rentals | VacationRental | 750,000 | |
Number of restaurants | Restaurant | 4.6 | |
Number of activities and attractions worldwide | ActivityandAttraction | 915,000 | |
Class B Common Stock | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Right to voting | 10 votes per share | |
Vote per common stock share | Vote / shares | 10 | |
Liberty | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Common stock purchased by Liberty | 4.8 | |
Beneficially ownership of shares of common stock | 18.2 | |
Beneficially ownership of shares of Common Stock Class B | 12.8 | |
Percentage of interest held by related party | 100.00% | |
LTRIP | ||
Description Of Business And Basis Of Presentation [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 | |
Vote per common stock share | Vote / shares | 1 | |
Beneficially ownership of equity securities | 57.50% | |
LTRIP | Class B Common Stock | ||
Description Of Business And Basis Of Presentation [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 | |
Vote per common stock share | Vote / shares | 10 |
Significant Accounting Polici47
Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Subsidiary | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Schedule Of Accounting Policies [Line Items] | |||
Advertising expense | $ 629,000,000 | $ 543,000,000 | $ 507,000,000 |
Prepaid marketing expenses | 5,000,000 | $ 5,000,000 | |
Prepaid Expense, Current | $ 5,000,000 | ||
Minimum maturities of short-term marketable securities | 90 days | 90 days | |
Maximum remaining maturity for short-term marketable securities | 12 months | 12 months | |
Maximum maturity period for marketable security | 3 years | ||
Weighted Average Maturity | 18 months | ||
Accounts receivable due period | 30 days | ||
Minimum maturity at purchase date for a short term marketable security | 90 days | ||
Minimum probability that the fair value of the reporting unit is less than the carrying amount | 50.00% | ||
Goodwill impairment loss | $ 0 | $ 0 | 0 |
Carrying value of indefinite-lived intangible assets | 30,000,000 | 30,000,000 | |
Deferred merchant payables | 156,000,000 | 128,000,000 | |
Net foreign currency exchange gains/(losses) | $ 1,000,000 | $ (4,000,000) | $ (4,000,000) |
Foreign currency exchange contracts maturity period, maximum | 90 days | ||
Customer Concentration Risk | Sales | Expedia | |||
Schedule Of Accounting Policies [Line Items] | |||
Customer concentration risk | 10.00% | 10.00% | 10.00% |
Customer Concentration Risk | Sales | Priceline | |||
Schedule Of Accounting Policies [Line Items] | |||
Customer concentration risk | 10.00% | 10.00% | 10.00% |
Customer Concentration Risk | Sales | Expedia and Priceline | |||
Schedule Of Accounting Policies [Line Items] | |||
Customer concentration risk | 43.00% | 46.00% | 46.00% |
Trademarks and Tradenames | |||
Schedule Of Accounting Policies [Line Items] | |||
Carrying value of indefinite-lived intangible assets | $ 30,000,000 | ||
Impairment of indefinite-lived intangible assets | $ 0 | ||
Minimum | |||
Schedule Of Accounting Policies [Line Items] | |||
Depreciation over the estimated useful lives of assets | 3 years | ||
Maximum | |||
Schedule Of Accounting Policies [Line Items] | |||
Depreciation over the estimated useful lives of assets | 5 years | ||
Stock Options | |||
Schedule Of Accounting Policies [Line Items] | |||
Term of stock options, granted | 10 years | ||
Stock options requisite service period | 4 years | ||
Stock options vest period | 4 years | ||
Restricted Stock Units | |||
Schedule Of Accounting Policies [Line Items] | |||
Stock options vest period | 4 years | ||
China | |||
Schedule Of Accounting Policies [Line Items] | |||
Number of operating subsidiaries | Subsidiary | 1 |
Significant Accounting Polici48
Significant Accounting Policies - Summary of Changes in the Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning of period | $ 9 | $ 6 | $ 7 |
Charges (recoveries) to earnings | 8 | 4 | 3 |
Write-offs, net of recoveries and other adjustments | (1) | (1) | (4) |
Balance, end of period | $ 16 | $ 9 | $ 6 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2016USD ($)Business | Dec. 31, 2015USD ($)Business | Dec. 31, 2017USD ($) | Aug. 31, 2015USD ($) | |||
Acquisitions And Dispositions [Line Items] | ||||||
Cost method investments | $ 14 | $ 12 | ||||
Disposal group, gain on sale of subsidiary | [1] | $ 20 | ||||
One of Chinese Subsidiaries | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Disposal group, percentage of ownership interest sold | 100.00% | |||||
Disposal group, total consideration | $ 28 | |||||
Disposal group, deconsolidated assets on sale of business | 11 | |||||
Disposal group, cash included in deconsolidated asset | 3 | |||||
Disposal group, deconsolidated liabilities on sale of business | $ 4 | |||||
Disposal group, gain on sale of subsidiary | 20 | |||||
Series of Individually Immaterial Business Acquisitions | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Acquisition-related costs | $ 1 | $ 1 | ||||
Number of business acquired | Business | 5 | 3 | ||||
Total acquisition purchase price | $ 34 | |||||
Cash consideration paid, net of cash acquired | 28 | $ 28 | ||||
Cash acquired from acquisition | 4 | |||||
Cash held back on acquisition | 2 | |||||
Purchase price consideration | $ 34 | [2] | $ 28 | |||
Tous Au Restaurant | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Jan. 31, 2016 | |||||
HouseTrip | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Apr. 30, 2016 | |||||
Citymaps | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Aug. 31, 2016 | |||||
Sneat | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Oct. 31, 2016 | |||||
Couverts | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Oct. 31, 2016 | |||||
ZeTrip | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Jan. 31, 2015 | |||||
BestTables | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | Mar. 31, 2015 | |||||
Dimmi | ||||||
Acquisitions And Dispositions [Line Items] | ||||||
Business acquisition percentage of outstanding shares of capital stock | 100.00% | |||||
Date of acquisition | May 31, 2015 | |||||
[1] | Refer to “Note 3 – Acquisitions and Dispositions” for information regarding our gain on sale of business in 2015. | |||||
[2] | Subject to adjustment based on indemnification obligations for general representations and warranties of certain acquired company stockholders. |
Acquisitions and Dispositions50
Acquisitions and Dispositions - Summary of Aggregate Purchase Price Consideration Allocated to Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 758 | $ 736 | $ 732 | |||
Series of Individually Immaterial Business Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | [1] | 17 | 17 | |||
Intangible assets | 25 | [2] | 12 | [3] | ||
Net tangible assets (liabilities) | (8) | [4] | 1 | |||
Deferred tax liabilities, net | (2) | |||||
Total purchase price consideration | $ 34 | [5] | $ 28 | |||
[1] | Goodwill is not deductible for tax purposes. | |||||
[2] | Identifiable definite-lived intangible assets acquired during 2016 were comprised of trade names of $4 million with a weighted average life of 10 years, customer lists and supplier relationships of $4 million with a weighted average life of 6 years, subscriber relationships of $5 million with a weighted average life of approximately 7 years, and technology and other of $12 million with a weighted average life of approximately 5 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2016 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. | |||||
[3] | Identifiable definite-lived intangible assets acquired during 2015 were comprised of trade names of $2 million with a weighted average life of approximately 10 years, customer lists and supplier relationships of $7 million with a weighted average life of approximately 6 years and technology and other of $3 million with a weighted average life of approximately 2 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2015 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. | |||||
[4] | Primarily includes cash acquired of $4 million, accounts receivable of $2 million, and liabilities assumed, including accrued expenses and deferred merchant payables of $3 million and $10 million, respectively, which reflect their respective fair values at acquisition. | |||||
[5] | Subject to adjustment based on indemnification obligations for general representations and warranties of certain acquired company stockholders. |
Acquisitions and Dispositions51
Acquisitions and Dispositions - Summary of Aggregate Purchase Price Consideration Allocated to Fair Value of Assets Acquired and Liabilities Assumed (Parenthetical) (Details) - Series of Individually Immaterial Business Acquisitions - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 25 | [1] | $ 12 | [2] |
Weighted average life of identifiable definite-lived intangible assets acquired | 6 years | 6 years | ||
Cash acquired from acquisition | $ 4 | |||
Assets acquired, accounts receivable | 2 | |||
Accrued Expenses | ||||
Business Acquisition [Line Items] | ||||
Liabilities assumed | 3 | |||
Deferred Merchant Payables | ||||
Business Acquisition [Line Items] | ||||
Liabilities assumed | 10 | |||
Trade Names | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 4 | $ 2 | ||
Weighted average life of identifiable definite-lived intangible assets acquired | 10 years | 10 years | ||
Customer Lists and Supplier Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 4 | $ 7 | ||
Weighted average life of identifiable definite-lived intangible assets acquired | 6 years | 6 years | ||
Subscriber Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 5 | |||
Weighted average life of identifiable definite-lived intangible assets acquired | 7 years | |||
Developed Technology and Other | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 12 | $ 3 | ||
Weighted average life of identifiable definite-lived intangible assets acquired | 5 years | 2 years | ||
[1] | Identifiable definite-lived intangible assets acquired during 2016 were comprised of trade names of $4 million with a weighted average life of 10 years, customer lists and supplier relationships of $4 million with a weighted average life of 6 years, subscriber relationships of $5 million with a weighted average life of approximately 7 years, and technology and other of $12 million with a weighted average life of approximately 5 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2016 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. | |||
[2] | Identifiable definite-lived intangible assets acquired during 2015 were comprised of trade names of $2 million with a weighted average life of approximately 10 years, customer lists and supplier relationships of $7 million with a weighted average life of approximately 6 years and technology and other of $3 million with a weighted average life of approximately 2 years. The overall weighted-average life of the identifiable definite-lived intangible assets acquired in the purchase of these businesses during 2015 was 6 years, and will be amortized on a straight-line basis over their estimated useful lives from acquisition date. |
Stock Based Awards and Other 52
Stock Based Awards and Other Equity Instruments - Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 96 | $ 85 | $ 72 |
Income tax benefit from stock-based compensation expense | (28) | (31) | (26) |
Total stock-based compensation expense, net of tax effect | 68 | 54 | 46 |
Selling and Marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 21 | 20 | 16 |
Technology and Content | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 40 | 40 | 28 |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 35 | $ 25 | $ 28 |
Stock Based Awards and Other 53
Stock Based Awards and Other Equity Instruments - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 05, 2017 | Jun. 28, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 20, 2011 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Capitalized stock based compensation as internal-use software and website development costs | $ 13 | $ 12 | $ 8 | ||||
Common shares registered for issuance under incentive plan | 17,500,000 | ||||||
Common stock share issuance under plan | 15,000,000 | ||||||
Cash received from stock option exercises | 3 | 7 | 12 | ||||
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 | $ 27 | 21 | 63 | ||||
Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of stock options issued | [1] | 2,333,000 | |||||
Term of stock options, granted | 10 years | ||||||
Stock awards vest period | 4 years | ||||||
RSU | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Stock awards vest period | 4 years | ||||||
RSU's issued under incentive plan | [2],[3] | 5,042,000 | |||||
2011 Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common shares registered for issuance under incentive plan | 17,400,000 | ||||||
Common shares previously registered for issuance under incentive plan | 7,400,000 | ||||||
Share registered under amendment | 10,000,000 | ||||||
Number of shares reserved for future stock-based awards under plan | 9,400,000 | ||||||
2011 Plan | Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Number of stock options issued | 2,333,361 | ||||||
Term of stock options, granted | 10 years | ||||||
Stock awards vest period | 4 years | ||||||
Closing stock price | $ 34.46 | ||||||
Total intrinsic value | $ 8 | $ 24 | $ 149 | ||||
Weighted-average grant date fair value of options granted | $ 16.50 | $ 22.95 | $ 33.02 | ||||
Total fair value of stock options vested | $ 40 | $ 28 | $ 36 | ||||
Cash received from stock option exercises | $ 3 | $ 7 | $ 12 | ||||
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 | 5,042,160 | ||||||
Deferred Compensation Plan for Non Employee Directors | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common shares registered for issuance under incentive plan | 100,000 | ||||||
[1] | Inclusive of 780,000 stock options awarded to our Chief Executive Officer and President, or CEO, during November 2017. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $17.33. These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. | ||||||
[2] | Excludes a performance-based RSU grant for 213,000 shares awarded to our CEO during November 2017. This award provides for vesting based on the extent to which the Company achieves certain financial and/or the CEO achieves certain strategic performance metrics relative to the targets to be established by the Company’s Compensation Committee. One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. The estimated grant-date fair value per RSU will be calculated upon the establishment of annual performance targets and each tranche will be amortized on a straight-line basis over its requisite service period. At any point in time during the vesting period, the award’s expense to date will at least equal the portion of the grant-date fair value that is expected to vest at that date. Based upon actual attainment relative to the target performance metrics, the CEO has the ability to receive up to 125% of the target number originally granted, or to be issued none at all | ||||||
[3] | Includes the following RSU grants awarded to our CEO, during November 2017: 1) 426,000 service-based RSUs; and 2) 213,000 market-based RSUs. The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $34.71. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of these awards, or $30.04 per RSU. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through December 31, 2020. Based upon actual attainment relative to the target performance metric, the CEO has the ability to receive up to 125% of the target number of market-based RSUs originally granted, or to be issued none at all |
Stock Based Awards and Other 54
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / sharesshares | ||
Options Outstanding | ||
Options Outstanding, Beginning balance | shares | 5,818 | |
Options Outstanding, Granted | shares | 2,333 | [1] |
Options Outstanding, Exercised | shares | (496) | [2] |
Options Outstanding, Cancelled or expired | shares | (802) | |
Options Outstanding, Ending balance | shares | 6,853 | |
Options Outstanding, Exercisable | shares | 3,340 | |
Options Outstanding, Vested and expected to vest | shares | 6,853 | [3] |
Weighted Average Exercise Price per share | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 57.60 | |
Options Granted, Weighted Average Exercise Price | $ / shares | 40.03 | [1] |
Options Exercised, Weighted Average Exercise Price | $ / shares | 29.37 | [2] |
Options Cancelled or expired, Weighted Average Exercise Price | $ / shares | 65.13 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | $ / shares | 52.78 | |
Options Exercisable, Weighted Average Exercise Price | $ / shares | 52.69 | |
Options Vested and expected to vest, Weighted Average Exercise Price | $ / shares | $ 52.78 | [3] |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 6 months | |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years 4 months 24 days | |
Options Vested and expected to vest, Weighted Average Remaining Contractual Life | 6 years 6 months | [3] |
Options Outstanding, Aggregate Intrinsic Value | $ | $ 3 | |
Options Exercisable, Aggregate Intrinsic Value | $ | 3 | |
Options Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 3 | [3] |
[1] | Inclusive of 780,000 stock options awarded to our Chief Executive Officer and President, or CEO, during November 2017. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $17.33. These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. | |
[2] | Inclusive of 294,410 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 which 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 consolidated statements of cash flows. | |
[3] | 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 55
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Parenthetical) (Details) - Stock Options - $ / shares | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2017 | Dec. 31, 2017 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock options issued | [1] | 2,333,000 | |
Options non converted into shares due to net share settlement | 294,410 | ||
Chief Executive Officer | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of stock options issued | 780,000 | ||
Estimated grant-date fair value per option pricing model | $ 17.33 | ||
Stock option vesting term | These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. | ||
Requisite service period for estimated grant-date fair value of stock awards | Aug. 1, 2022 | ||
[1] | Inclusive of 780,000 stock options awarded to our Chief Executive Officer and President, or CEO, during November 2017. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $17.33. These stock options shall vest in equal installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. |
Stock Based Awards and Other 56
Stock Based Awards and Other Equity Instruments - Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Risk free interest rate | 2.02% | 1.20% | 1.58% |
Expected term (in years) | 6 years 1 month 17 days | 4 years 10 months 6 days | 5 years 5 months 1 day |
Expected volatility | 42.14% | 41.81% | 41.79% |
Stock Based Awards and Other 57
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity, Including Service Based Awards and Performance-Based Awards (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / sharesshares | ||
RSUs outstanding | ||
Unvested RSUs outstanding, Beginning balance | shares | 2,856 | |
Unvested RSUs, Granted | shares | 5,042 | [1],[2] |
Unvested RSUs, Vested and released | shares | (1,030) | [3] |
Unvested RSUs, Cancelled | shares | (853) | |
Unvested RSUs outstanding, Ending balance | shares | 6,015 | |
RSUs outstanding, Expected to vest | shares | 6,015 | [4] |
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 | 41.09 | [1],[2] |
Weighted Average Grant-Date Fair Value Per Share, Vested and released | $ / shares | 67.25 | [3] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 52.64 | |
Unvested RSUs outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | 48.14 | |
Weighted Average Grant-Date Fair Value Per Share, Expected to vest | $ / shares | $ 48.14 | [4] |
Aggregate Intrinsic Value | ||
Unvested RSUs outstanding, Aggregate Intrinsic Value | $ | $ 207 | |
RSUs Vested and expected to vest, Aggregate Intrinsic Value | $ | $ 207 | [4] |
[1] | Excludes a performance-based RSU grant for 213,000 shares awarded to our CEO during November 2017. This award provides for vesting based on the extent to which the Company achieves certain financial and/or the CEO achieves certain strategic performance metrics relative to the targets to be established by the Company’s Compensation Committee. One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. The estimated grant-date fair value per RSU will be calculated upon the establishment of annual performance targets and each tranche will be amortized on a straight-line basis over its requisite service period. At any point in time during the vesting period, the award’s expense to date will at least equal the portion of the grant-date fair value that is expected to vest at that date. Based upon actual attainment relative to the target performance metrics, the CEO has the ability to receive up to 125% of the target number originally granted, or to be issued none at all | |
[2] | Includes the following RSU grants awarded to our CEO, during November 2017: 1) 426,000 service-based RSUs; and 2) 213,000 market-based RSUs. The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $34.71. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of these awards, or $30.04 per RSU. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through December 31, 2020. Based upon actual attainment relative to the target performance metric, the CEO has the ability to receive up to 125% of the target number of market-based RSUs originally granted, or to be issued none at all | |
[3] | Inclusive of 301,932 RSUs withheld to satisfy required employee tax withholding requirements due to net share settlement. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2011 Incentive Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows. | |
[4] | The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our expected to vest calculation unless necessary for a performance condition award, respectively |
Stock Based Awards and Other 58
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity, Including Service Based Awards and Performance-Based Awards (Parenthetical) (Details) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2017Installment$ / sharesshares | Dec. 31, 2017$ / sharesshares | ||
Service-based RSUs | Chief Executive Officer | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock awards granted | 426,000 | ||
Stock awards vesting term | The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. | ||
Number of vesting annual installments | Installment | 2 | ||
Grant date fair value of stock awards granted | $ / shares | $ 34.71 | ||
Requisite service period for estimated grant-date fair value of stock awards | Aug. 1, 2022 | ||
Market-based RSUs | Chief Executive Officer | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock awards granted | 213,000 | ||
Stock awards vesting term | The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. | ||
Grant date fair value of stock awards granted | $ / shares | $ 30.04 | ||
Requisite service period for estimated grant-date fair value of stock awards | Dec. 31, 2020 | ||
Performance measurement period start date | Jan. 1, 2018 | ||
Performance measurement period end date | Dec. 31, 2020 | ||
Percentage of originally granted shares that may be earned upon performance achievement, maximum | 125.00% | ||
Percentage of originally granted shares that may be earned upon performance achievement, minimum | 0.00% | ||
Performance-based RSUs | Chief Executive Officer | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock awards granted | 213,000 | ||
Stock awards vesting term | One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. | ||
Percentage of originally granted shares that may be earned upon performance achievement, maximum | 125.00% | ||
Percentage of originally granted shares that may be earned upon performance achievement, minimum | 0.00% | ||
Restricted Stock Units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock awards granted | [1],[2] | 5,042,000 | |
Grant date fair value of stock awards granted | $ / shares | [1],[2] | $ 41.09 | |
RSUs withheld to satisfy withholding tax requirements | 301,932 | ||
[1] | Excludes a performance-based RSU grant for 213,000 shares awarded to our CEO during November 2017. This award provides for vesting based on the extent to which the Company achieves certain financial and/or the CEO achieves certain strategic performance metrics relative to the targets to be established by the Company’s Compensation Committee. One quarter of these RSUs may vest and settle annually based on actual performance relative to the targets established annually for each of the four fiscal years ending December 31, 2018; December 31, 2019; December 31, 2020 and December 31, 2021. The estimated grant-date fair value per RSU will be calculated upon the establishment of annual performance targets and each tranche will be amortized on a straight-line basis over its requisite service period. At any point in time during the vesting period, the award’s expense to date will at least equal the portion of the grant-date fair value that is expected to vest at that date. Based upon actual attainment relative to the target performance metrics, the CEO has the ability to receive up to 125% of the target number originally granted, or to be issued none at all | ||
[2] | Includes the following RSU grants awarded to our CEO, during November 2017: 1) 426,000 service-based RSUs; and 2) 213,000 market-based RSUs. The service-based RSU award provides for vesting in two equal annual installments on each of August 1, 2021 and August 1, 2022, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $34.71. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through August 1, 2022. The market-based RSU award provides for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2018 through December 31, 2020 relative to the TSR performance of the Nasdaq Composite Total Return Index. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices and TSR of the Company and the Nasdaq Composite Total Return Index over the performance period, was used to calculate the grant-date fair value of these awards, or $30.04 per RSU. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through December 31, 2020. Based upon actual attainment relative to the target performance metric, the CEO has the ability to receive up to 125% of the target number of market-based RSUs originally granted, or to be issued none at all |
Stock Based Awards and Other 59
Stock Based Awards and Other Equity Instruments - Summary of Unrecognized Compensation Expense and Weighted Average Period Remaining (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 52 |
Weighted average period remaining (in years) | 2 years 10 months 24 days |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period remaining (in years) | 3 years |
Unrecognized compensation expense, RSUs | $ 222 |
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 | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||
Numerator: | |||||||||||||||||||
Net income (loss) | $ (84) | [1] | $ 25 | [1] | $ 27 | [1] | $ 13 | [1] | $ 1 | $ 55 | $ 34 | $ 29 | $ (19) | $ 120 | $ 198 | ||||
Denominator: | |||||||||||||||||||
Weighted average shares used to compute Basic EPS | 140,445 | 145,443 | 143,836 | ||||||||||||||||
Weighted average effect of dilutive securities: | |||||||||||||||||||
Stock options | 1,129 | 1,839 | |||||||||||||||||
RSUs | 321 | 292 | |||||||||||||||||
Weighted average shares used to compute Diluted EPS | 140,445 | 146,893 | 145,967 | ||||||||||||||||
Basic EPS | $ (0.60) | [2] | $ 0.18 | [2] | $ 0.19 | [2] | $ 0.09 | [2] | $ 0.01 | [2] | $ 0.38 | [2] | $ 0.23 | [2] | $ 0.20 | [2] | $ (0.14) | $ 0.83 | $ 1.38 |
Diluted EPS | $ (0.60) | [2] | $ 0.18 | [2] | $ 0.19 | [2] | $ 0.09 | [2] | $ 0.01 | [2] | $ 0.37 | [2] | $ 0.23 | [2] | $ 0.20 | [2] | $ (0.14) | $ 0.82 | $ 1.36 |
[1] | During the fourth quarter of 2017, we recognized $67 million of Transition Tax and $6 million of tax expense recorded for the remeasurement of our net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. | ||||||||||||||||||
[2] | Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share may not equal the total computed for the year. |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - Stock Options and RSUs - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 12.5 | 3.9 | 2.7 |
Performance Shares | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 0.6 | 0.1 | 0.1 |
Financial Instruments and Fai62
Financial Instruments and Fair Value Measurements - Schedule of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents | $ 673 | $ 612 |
Short-Term Marketable Securities | 35 | 118 |
Long-Term Marketable Securities | 27 | 16 |
Cash | 663 | 595 |
Cash, cash equivalents and marketable securities, Amortized Cost | 735 | 746 |
Cash, cash equivalents and marketable securities, Fair Value | 735 | 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 | 71 | 134 |
Fair Value | 71 | 134 |
Cash and Cash Equivalents | 9 | |
Short-Term Marketable Securities | 35 | 118 |
Long-Term Marketable Securities | 27 | 16 |
Level 2 | U.S. Agency Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 11 | 23 |
Fair Value | 11 | 23 |
Short-Term Marketable Securities | 6 | 21 |
Long-Term Marketable Securities | 5 | 2 |
Level 2 | US treasury securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 1 | 8 |
Fair Value | 1 | 8 |
Short-Term Marketable Securities | 1 | 8 |
Level 2 | Certificates of Deposit | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 2 | 16 |
Fair Value | 2 | 16 |
Short-Term Marketable Securities | 2 | 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 | 11 | 5 |
Fair Value | 11 | 5 |
Cash and Cash Equivalents | 9 | |
Short-Term Marketable Securities | 2 | 5 |
Level 2 | Corporate Debt Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 46 | 82 |
Fair Value | 46 | 82 |
Short-Term Marketable Securities | 24 | 69 |
Long-Term Marketable Securities | $ 22 | $ 13 |
Financial Instruments and Fai63
Financial Instruments and Fair Value Measurements - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)Company | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Financial Instruments [Line Items] | |||
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 (loss) related to forward contracts | $ (1,000,000) | $ 2,000,000 | $ 2,000,000 |
Derivative instruments not designated as hedging instruments, description of terms | Our forward contracts, which we have entered into to date, have not been designated as hedges and have had maturities of less than 90 days | ||
Cost method investments | $ 12,000,000 | 14,000,000 | |
Level 3 | Recurring | |||
Financial Instruments [Line Items] | |||
Assets measured at fair value | 0 | 0 | |
Liabilities measured at fair value | $ 0 | $ 0 | |
Cost-method Investments | |||
Financial Instruments [Line Items] | |||
Number of privately-held companies | Company | 1 | ||
Cost-method Investments | Interest Income and Other, Net | |||
Financial Instruments [Line Items] | |||
Recognized loss to investment | $ 2,000,000 |
Financial Instruments and Fai64
Financial Instruments and Fair Value Measurements - Fair Value and Notional Principal Amounts of Outstanding or Unsettled Derivative Instruments (Details) | Dec. 31, 2016USD ($) | |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | ||
Derivatives Fair Value [Line Items] | ||
Foreign currency exchange-forward contracts | $ 6,000,000 | [1],[2] |
[1] | Derivative contracts address foreign currency exchange fluctuations for the Euro versus the U.S. dollar. The Company had no outstanding derivative contracts as of December 31, 2017 and two outstanding derivative contracts as of December 31, 2016. | |
[2] | The fair value of our outstanding derivatives as of December 31, 2016 was not material and was reported as an asset in prepaid expenses and other current assets on our consolidated balance sheet. 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. |
Financial Instruments and Fai65
Financial Instruments and Fair Value Measurements - Fair Value and Notional Principal Amounts of Outstanding or Unsettled Derivative Instruments (Parenthetical) (Details) - Contract | Dec. 31, 2017 | Dec. 31, 2016 |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | ||
Derivatives Fair Value [Line Items] | ||
Number of outstanding derivatives contracts | 0 | 2 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | $ 440 | $ 371 | |
Less: accumulated depreciation | (177) | (111) | |
Total | 263 | 260 | |
Capitalized Software and Website Development | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 213 | 153 | |
Total | 97 | 86 | |
Building | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | [1] | 123 | 123 |
Leasehold Improvements | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 39 | 39 | |
Computer Equipment and Purchased Software | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 46 | 37 | |
Furniture, Office Equipment and Other | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | $ 19 | $ 19 | |
[1] | The Company is deemed for accounting purposes to be the owner of its corporate headquarters building under GAAP, and depreciates the asset over its estimated useful life of 40 years on a straight-line basis. Refer to “Note 13 – Commitments and Contingencies,” for additional information on our corporate headquarters lease. |
Property and Equipment, Net -67
Property and Equipment, Net - Components of Property and Equipment (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Building | |
Property Plant And Equipment [Line Items] | |
Property Plant And Equipment Useful Life | 40 years |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Line Items] | |||
Property and equipment, net | $ 263 | $ 260 | |
Depreciation of property and equipment, including amortization of internal-use software and website development | 79 | 69 | $ 57 |
Capitalized Software and Website Development | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, net | 97 | 86 | |
Capitalized computer software and website development costs | 65 | 62 | 52 |
Depreciation of property and equipment, including amortization of internal-use software and website development | $ 54 | $ 46 | $ 37 |
Goodwill and Intangible Asset69
Goodwill and Intangible Assets, Net - Summary of Changes in Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Goodwill [Line Items] | |||
Beginning balance | $ 736 | $ 732 | |
Acquisitions | [1] | 17 | |
Other adjustments | [2] | 22 | (13) |
Ending balance | 758 | 736 | |
Hotel Segment | |||
Goodwill [Line Items] | |||
Beginning balance | 451 | 442 | |
Acquisitions | [1] | 10 | |
Other adjustments | [2] | (1) | |
Ending balance | 451 | 451 | |
Non-Hotel Segment | |||
Goodwill [Line Items] | |||
Beginning balance | 285 | 290 | |
Acquisitions | [1] | 7 | |
Other adjustments | [2] | 22 | (12) |
Ending balance | $ 307 | $ 285 | |
[1] | The additions to goodwill relate to our business acquisitions. Refer to “Note 3— Acquisitions and Dispositions,” for further information. | ||
[2] | Primarily related to impact of changes in foreign currency exchange rates to goodwill. |
Goodwill and Intangible Asset70
Goodwill and Intangible Assets, Net - Summary of Intangible Assets Acquired in Business Combinations (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Intangible assets with definite lives | $ 224 | $ 217 |
Less: accumulated amortization | (112) | (80) |
Intangible assets with definite lives, net | 112 | 137 |
Intangible assets with indefinite lives | 30 | 30 |
Total | $ 142 | $ 167 |
Goodwill and Intangible Asset71
Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 32,000,000 | $ 32,000,000 | $ 36,000,000 |
Goodwill, Impairment Loss | 0 | 0 | 0 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset72
Goodwill and Intangible Assets, Net - Components of Intangible Assets with Definite Lives (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 4 years 7 months 6 days | |
Gross Carrying Amount | $ 224 | $ 217 |
Accumulated Amortization | (112) | (80) |
Intangible assets with definite lives, net | $ 112 | 137 |
Trade Names and Trademarks | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 6 years 9 months 18 days | |
Gross Carrying Amount | $ 58 | 56 |
Accumulated Amortization | (20) | (14) |
Intangible assets with definite lives, net | $ 38 | 42 |
Customer Lists and Supplier Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 3 years 7 months 6 days | |
Gross Carrying Amount | $ 87 | 84 |
Accumulated Amortization | (43) | (31) |
Intangible assets with definite lives, net | $ 44 | 53 |
Subscriber Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 4 years 3 months 18 days | |
Gross Carrying Amount | $ 35 | 33 |
Accumulated Amortization | (22) | (15) |
Intangible assets with definite lives, net | $ 13 | 18 |
Technology and Other | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 2 years 7 months 6 days | |
Gross Carrying Amount | $ 44 | 44 |
Accumulated Amortization | (27) | (20) |
Intangible assets with definite lives, net | $ 17 | $ 24 |
Goodwill and Intangible Asset73
Goodwill and Intangible Assets, Net - Summary of Estimated Future Amortization Expense Related to Intangible Assets with Definite Lives (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 31 | |
2,019 | 27 | |
2,020 | 22 | |
2,021 | 14 | |
2,022 | 7 | |
2023 and thereafter | 11 | |
Intangible assets with definite lives, net | $ 112 | $ 137 |
Debt - Summary of Total Outstan
Debt - Summary of Total Outstanding Debt (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Short-Term Debt: | |||
Short-Term Debt | [1] | $ 7 | $ 80 |
Long-Term Debt: | |||
Long-Term Debt | 230 | 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 | $ 230 | $ 91 | |
[1] | The weighted-average interest rate on short-term debt was 5.0% as of December 31, 2017 and 2.1% as of December 31, 2016. |
Debt - Summary of Total Outst75
Debt - Summary of Total Outstanding Debt (Parenthetical) (Details) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Weighted-average interest rate on short-term debt | 5.00% | 2.10% |
Debt - Two Thousand Eleven Cred
Debt - Two Thousand Eleven Credit Facility - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Dec. 31, 2011 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Borrowing capacity under Credit Facility | $ 600,000,000 | ||||
Total interest and commitments fees | $ 15,000,000 | $ 12,000,000 | $ 10,000,000 | ||
2011 Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Borrowing capacity under Credit Facility | $ 200,000,000 | ||||
Credit facility, expiration period | 5 years | ||||
Credit facility, maturity date | Dec. 31, 2016 | ||||
Term Loan | |||||
Debt Instrument [Line Items] | |||||
Term Loan Facility, principal amount | $ 400,000,000 | ||||
Period of Term Loan Facility | 5 years | ||||
Borrowings, maturity date | Dec. 31, 2016 | ||||
Principal amount repaid | $ 290,000,000 | ||||
Total interest and commitments fees | $ 3,000,000 | ||||
Gain (Loss) on Extinguishment of Debt | $ 0 |
Debt - Two Thousand Fifteen Cre
Debt - Two Thousand Fifteen Credit Facility - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
May 31, 2017 | Jun. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | |
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | $ 600,000,000 | |||||
Total interest expense and commitments fees | $ 15,000,000 | $ 12,000,000 | $ 10,000,000 | |||
Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Letters of credit outstanding amount | 3,000,000 | |||||
2015 Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Total interest expense and commitments fees | $ 6,000,000 | 4,000,000 | $ 2,000,000 | |||
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 | |||||
Amount borrowed | 290,000,000 | |||||
Line of credit facility additional borrowing | $ 435,000,000 | 101,000,000 | ||||
Repayments of Debt | $ 296,000,000 | $ 210,000,000 | ||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.15% | |||||
Deferred financing costs | $ 3,000,000 | |||||
Lender fees and debt financing costs capitalized | $ 2,000,000 | $ 3,000,000 | ||||
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% | |||||
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 | 2.74% | |||||
2015 Credit Facility | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | $ 15,000,000 | |||||
Letters of credit outstanding amount | 3,000,000 | |||||
2015 Credit Facility | Borrowings On Same Day Notice | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing capacity under Credit Facility | $ 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) - USD ($) | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2011 | |
Debt Instrument [Line Items] | |||
Borrowing capacity under Credit Facility | $ 600,000,000 | ||
2016 Credit Facility | Revolving Credit Facility | Lender | |||
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. | ||
Amount borrowed | $ 73,000,000 | ||
Outstanding borrowings | $ 0 | ||
2016 Credit Facility | Revolving Credit Facility | Lender | Minimum | |||
Debt Instrument [Line Items] | |||
Repayment term of borrowings | 1 month | ||
2016 Credit Facility | Revolving Credit Facility | Lender | Maximum | |||
Debt Instrument [Line Items] | |||
Repayment term of borrowings | 6 months | ||
2016 Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Lender | |||
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) | 12 Months Ended | |||
Dec. 31, 2017USD ($)CreditFacility | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2011USD ($) | |
Debt Instrument [Line Items] | ||||
Borrowing capacity under Credit Facility | $ 600,000,000 | |||
Chinese Credit Facilities | ||||
Debt Instrument [Line Items] | ||||
Number of credit facilities | CreditFacility | 2 | |||
Outstanding borrowings | $ 7,000,000 | $ 7,000,000 | ||
Chinese Credit Facilities | Chinese Credit Facility Boa | ||||
Debt Instrument [Line Items] | ||||
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. | |||
Outstanding borrowings | $ 0 | 0 | ||
Chinese Credit Facilities | Chinese Credit Facility JPM | ||||
Debt Instrument [Line Items] | ||||
Borrowing capacity under Credit Facility | $ 10,000,000 | ¥ 70,000,000 | ||
Period of credit facility | 1 year | |||
Interest rate description | Chinese Credit Facility—JPM generally bears 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. | |||
Outstanding borrowings | $ 7,000,000 | $ 7,000,000 | ||
Line of credit, interest rate basis | 5.00% | 4.35% | 4.35% |
Income Taxes - Summary of Our D
Income Taxes - Summary of Our Domestic and Foreign Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 81 | $ 64 | $ 67 |
Foreign | 29 | 87 | 172 |
Income before income taxes | $ 110 | $ 151 | $ 239 |
Income Taxes - Summary of the C
Income Taxes - Summary of the Components of Our Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Current income tax expense: | ||||
Federal | $ 93 | $ 38 | $ 48 | |
State | 1 | 2 | 8 | |
Foreign | 6 | 11 | 22 | |
Current income tax expense | 100 | 51 | 78 | |
Deferred income tax expense (benefit): | ||||
Federal | 25 | (12) | (29) | |
State | 2 | (3) | (2) | |
Foreign | 2 | (5) | (6) | |
Deferred income tax expense (benefit): | 29 | (20) | (37) | |
Provision for income taxes | $ 129 | [1] | $ 31 | $ 41 |
[1] | The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Feb. 02, 2018 | Dec. 22, 2017 | Jan. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | Dec. 31, 2014 |
Income Taxes [Line Items] | ||||||||||
Decrease in income tax payable attributable to exercise or settlement of stock-based awards | $ (27) | $ (21) | $ (63) | |||||||
Valuation allowance on deferred tax assets | $ 55 | $ 55 | 27 | |||||||
Increase related to additional foreign net operating losses | 28 | |||||||||
Income tax expense at federal statutory rate | 35.00% | |||||||||
Transition tax | $ 67 | 67 | $ 67 | |||||||
Income tax expense recorded due to remeasurement of net deferred tax assets | $ 6 | 6 | ||||||||
Tax benefit from subsidiary | 5 | 6 | 13 | |||||||
Cumulative undistributed earnings of foreign subsidiaries | 882 | 882 | ||||||||
Unrecognized tax benefits | 123 | 123 | 105 | $ 89 | $ 67 | |||||
Unrecognized tax benefits that would impact effective tax rate | 78 | 78 | ||||||||
Total gross interest and penalties accrued | 13 | $ 13 | $ 9 | |||||||
Minimum | ||||||||||
Income Taxes [Line Items] | ||||||||||
Global intangible low taxed income tax rate | 10.00% | |||||||||
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 | |||||||||
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 | |||||||||
Scenario Forecast | ||||||||||
Income Taxes [Line Items] | ||||||||||
Income tax expense at federal statutory rate | 21.00% | |||||||||
Cumulative undistributed earnings of foreign subsidiaries | $ 557 | |||||||||
Scenario Forecast | 2015 Credit Facility | ||||||||||
Income Taxes [Line Items] | ||||||||||
One time repatriation of foreign earnings, amount | $ 325 | |||||||||
Singapore | ||||||||||
Income Taxes [Line Items] | ||||||||||
Singapore's effective tax rate | 5.00% | |||||||||
Income tax expense at federal statutory rate | 17.00% | |||||||||
Tax incentive agreement expiration date | Jun. 30, 2021 | |||||||||
Decrease to the 2015 provision for income tax expense | $ 1 | |||||||||
Federal | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards | 9 | $ 9 | ||||||||
Expiration date of NOLs | Between 2020 and 2037 | |||||||||
State | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards | 41 | $ 41 | ||||||||
Expiration date of NOLs | Between 2020 and 2037 | |||||||||
Foreign | ||||||||||
Income Taxes [Line Items] | ||||||||||
Operating loss carryforwards | $ 171 | $ 171 | ||||||||
Expiration date of NOLs | Between 2018 and 2028 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Stock-based compensation | $ 36 | $ 52 |
Net operating loss carryforwards | 56 | 46 |
Provision for accrued expenses | 4 | 12 |
Deferred rent | 3 | 5 |
Lease financing obligation | 22 | 33 |
Foreign advertising spend | 13 | 10 |
Deferred expense related to cost-sharing arrangement | 26 | 30 |
Interest carryforward | 7 | |
Charitable contribution carryforward | 20 | |
Other | 7 | 7 |
Total deferred tax assets | 174 | 215 |
Less: valuation allowance | (55) | (27) |
Net deferred tax assets | 119 | 188 |
Deferred tax liabilities: | ||
Intangible assets | (59) | (83) |
Property and equipment | (21) | (28) |
Prepaid expenses | (4) | (6) |
Building - corporate headquarters | (20) | (31) |
Deferred income related to cost-sharing arrangement | (13) | (10) |
Total deferred tax liabilities | (117) | (158) |
Net deferred tax asset (liability) | $ 2 | $ 30 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | ||||
Income tax expense at the federal statutory rate of 35% | $ 38 | $ 53 | $ 84 | |
Foreign rate differential | (25) | (35) | (53) | |
State income taxes, net of effect of federal tax benefit | 5 | 4 | 4 | |
Unrecognized tax benefits and related interest | 12 | 11 | 12 | |
Change in cost-sharing treatment of stock-based compensation | (5) | (6) | (13) | |
Non-deductible transaction costs | 1 | |||
Impacts related to the 2017 Tax Act | 73 | |||
Research tax credit | (8) | (10) | (3) | |
Stock-based compensation | 13 | 2 | 2 | |
Change in valuation allowance | 25 | 9 | 5 | |
Other, net | 1 | 3 | 2 | |
Provision for income taxes | $ 129 | [1] | $ 31 | $ 41 |
[1] | The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. |
Income Taxes - Reconciliation85
Income Taxes - Reconciliation of the Provision for Income Taxes (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | |
Income tax expense at federal statutory rate | 35.00% |
Income Taxes - Reconciliation86
Income Taxes - Reconciliation of the Beginning and Ending Amount of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Balance, beginning of year | $ 105 | $ 89 | $ 67 |
Increases to tax positions related to the current year | 17 | 16 | 15 |
Increases to tax positions related to the prior year | 1 | 1 | 7 |
Reductions due to lapsed statute of limitations | (1) | ||
Balance, end of year | $ 123 | $ 105 | $ 89 |
Accrued Expenses and Other Cu87
Accrued Expenses and Other Current Liabilities - Details of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued employee salary, bonus, and related benefits | $ 60 | $ 53 |
Accrued marketing costs | 39 | 37 |
Other | 37 | 37 |
Total | $ 136 | $ 127 |
Other Long-Term Liabilities - S
Other Long-Term Liabilities - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Liabilities Noncurrent [Abstract] | |||
Unrecognized tax benefits | [1] | $ 127 | $ 108 |
Long-term income taxes payable | [2] | 61 | |
Financing obligation, net of current portion | [3] | 84 | 84 |
Other | [4] | 21 | 18 |
Total other long term liabilities | $ 293 | $ 210 | |
[1] | Refer to “Note 10—Income Taxes” for additional information on our unrecognized tax benefits. Amount includes accrued interest related to this liability. | ||
[2] | Amount relates to the long-term portion of Transition Tax related to 2017 Tax Act at December 31, 2017. Refer to “Note 10 – Income Taxes,” for additional information. | ||
[3] | Refer to “Note 13 – Commitments and Contingencies,” for additional information on our corporate headquarters lease. | ||
[4] | Amounts primarily consist of long-term deferred rent balances related to our operating leases for office space. |
Commitments and Contingencies -
Commitments and Contingencies - Material Contractual Obligations, Commercial Commitments and Outstanding Debt (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitment And Contingencies [Line Items] | |
Property leases, Total | $ 228 |
Property leases, Less than 1 year | 28 |
Property leases, 1 to 3 years | 53 |
Property leases, 3 to 5 years | 51 |
Property leases, More than 5 years | 96 |
Contractual Obligation, Total | 262 |
Contractual Obligation, Less than 1 year | 35 |
Contractual Obligation, 1 to 3 years | 69 |
Contractual Obligation, 3 to 5 years | 62 |
Contractual Obligation, More than 5 years | 96 |
Expected Interest and Commitment Fee Payments on 2015 Credit Facility | |
Commitment And Contingencies [Line Items] | |
Contractual Obligation, Total | 34 |
Contractual Obligation, Less than 1 year | 7 |
Contractual Obligation, 1 to 3 years | 16 |
Contractual Obligation, 3 to 5 years | $ 11 |
Commitments and Contingencies90
Commitments and Contingencies - Material Contractual Obligations, Commercial Commitments and Outstanding Debt (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Unrecognized tax benefits | [1] | $ 127 | $ 108 |
Long-term income taxes payable | [2] | $ 61 | |
[1] | Refer to “Note 10—Income Taxes” for additional information on our unrecognized tax benefits. Amount includes accrued interest related to this liability. | ||
[2] | Amount relates to the long-term portion of Transition Tax related to 2017 Tax Act at December 31, 2017. Refer to “Note 10 – Income Taxes,” for additional information. |
Commitments and Contingencies91
Commitments and Contingencies - Additional Information (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2013ft² | Dec. 31, 2017USD ($)ft²Location | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Commitment And Contingencies [Line Items] | ||||
Rental expense | $ 18 | $ 18 | $ 19 | |
Lease expiration date | Dec. 1, 2030 | |||
Sublease income | $ 3 | 2 | 1 | |
Leased area | ft² | 280,000 | |||
Total interest and commitments fees | 15 | 12 | 10 | |
Depreciation | $ 79 | 69 | 57 | |
Leased location | Location | 40 | |||
Letter of Credit | ||||
Commitment And Contingencies [Line Items] | ||||
Letters of credit outstanding amount | $ 3 | |||
North America And Europe And Asia Pacific | ||||
Commitment And Contingencies [Line Items] | ||||
Lease expiration date | Jun. 1, 2027 | |||
Leased area of office space | ft² | 450,000 | |||
Corporate HQ Building | ||||
Commitment And Contingencies [Line Items] | ||||
Lease expiration date | Dec. 1, 2030 | |||
Initial term of Lease | 15 years 7 months | |||
Extended Lease Term | 5 years | |||
Total interest and commitments fees | $ 7 | 7 | 4 | |
Depreciation | 3 | 3 | 2 | |
Rent expenses | 2 | $ 2 | $ 1 | |
Security deposits | $ 1 |
Commitments and Contingencies92
Commitments and Contingencies - Future Minimum Commitments Under Our corporate Headquarters Lease and Other Non-Cancelable Operating Leases (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitment And Contingencies [Line Items] | |
2,018 | $ 28 |
Thereafter | 96 |
Property leases, Total | 228 |
2,018 | (3) |
2,019 | (3) |
2,020 | (2) |
2,021 | (2) |
2,022 | (1) |
Total | (11) |
2,018 | 28 |
2,019 | 27 |
2,020 | 26 |
2,021 | 25 |
2,022 | 26 |
Thereafter | 96 |
Total | 228 |
Corporate Headquarters Lease | |
Commitment And Contingencies [Line Items] | |
2,018 | 9 |
2,019 | 9 |
2,020 | 9 |
2,021 | 10 |
2,022 | 10 |
Thereafter | 77 |
Property leases, Total | 124 |
Other Operating Leases | |
Commitment And Contingencies [Line Items] | |
2,018 | 22 |
2,019 | 21 |
2,020 | 19 |
2,021 | 17 |
2,022 | 17 |
Thereafter | 19 |
Property leases, Total | $ 115 |
Commitments and Contingencies93
Commitments and Contingencies - Future Minimum Commitments Under Our corporate Headquarters Lease and Other Non-Cancelable Operating Leases (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Other long-term liabilities under financial obligation | [1] | $ 84 | $ 84 |
[1] | Refer to “Note 13 – Commitments and Contingencies,” for additional information on our corporate headquarters lease. |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Automatic enrollment feature pre-tax | 6.00% | ||
Maximum employer contribution | 50.00% | ||
Maximum employee contributions percentage to receive 50% matching | 6.00% | ||
Employer match, percent | 3.00% | ||
Contributions vested with the employees | 2 years | ||
Contributions to plans | $ 9 | $ 9 | $ 7 |
Target bonus multiplier | 1, 1.5 or 2 | ||
Severance Costs | $ 1 | ||
2011 Plan | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Common stock reserved for issuance to non-employee directors | 9,400,000 | ||
Director | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Common stock reserved for issuance to non-employee directors | 3,336 | ||
Director | 2011 Plan | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Common stock reserved for issuance to non-employee directors | 100,000 | ||
Maximum | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
No of installments for payments upon termination | Payments upon termination will be made in either one lump sum or up to five annual installments, as elected by the eligible director at the time of the deferral election. | ||
Period of continued payment of base salary in event of termination by company without cause more than 3 months prior to or 12 months following change in control | 18 months | ||
Period of continued coverage of health insurance premium in event of termination by company without cause more than 3 months prior to or 12 months following change in control | 18 months | ||
Period of lump sum salary payment in event of termination by company without cause or by participant for good reason within 3 months prior to or 12 months following change in control | 24 months | ||
Period of lump sum insurance premium payment in event of termination by company without cause or by participant for good reason within 3 months prior to or 12 months following change in control | 24 months | ||
Minimum | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Period of continued payment of base salary in event of termination by company without cause more than 3 months prior to or 12 months following change in control | 6 months | ||
Period of continued coverage of health insurance premium in event of termination by company without cause more than 3 months prior to or 12 months following change in control | 6 months | ||
Period of lump sum salary payment in event of termination by company without cause or by participant for good reason within 3 months prior to or 12 months following change in control | 12 months | ||
Period of lump sum insurance premium payment in event of termination by company without cause or by participant for good reason within 3 months prior to or 12 months following change in control | 12 months | ||
Pre-tax basis | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Maximum annual employee contribution, percent | 50.00% | ||
After-tax basis | |||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Maximum annual employee contribution, percent | 10.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2017USD ($)Vote / sharesDirectors$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015$ / sharesshares | Jan. 25, 2017USD ($) | Dec. 31, 2014shares | Feb. 15, 2013USD ($) | |
Schedule Of Capitalization Equity [Line Items] | ||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||
Common stock, shares authorized | 1,600,000,000 | 1,600,000,000 | 1,600,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Percentage of directors elected by common stock holders | 25.00% | |||||||
Number of directors | Directors | 3 | |||||||
Conversion of Class B common stock | 100.00% | |||||||
Common stock, shares issued | 134,706,467 | 135,617,263 | 134,706,467 | |||||
Common stock, shares outstanding | 131,310,980 | 126,142,773 | 131,310,980 | |||||
Authorized the repurchase of shares of common stock | $ | $ 250,000,000 | $ 250,000,000 | ||||||
Repurchase of common stock, shares | 4,123,065 | 6,079,003 | 2,002,356 | 0 | ||||
Average price of shares repurchased, common stock | $ / shares | $ 60.63 | $ 41.13 | $ 52.35 | |||||
Aggregate cost of shares repurchased, common stock | $ | $ 250,000,000 | $ 105,000,000 | ||||||
Treasury stock, shares | 3,395,487 | 9,474,490 | 3,395,487 | |||||
Aggregate cost of treasury stock | $ | $ 197,000,000 | $ 447,000,000 | $ 197,000,000 | |||||
Issuance of treasury stock as charitable contribution, Shares (Note 15) | 801,042 | |||||||
Dividend declared on common stock | $ / shares | $ 0 | $ 0 | $ 0 | |||||
Class B Common Stock | ||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Right to voting | 10 votes per share | |||||||
Vote per common stock share | Vote / shares | 10 | |||||||
Common stock, shares issued | 12,799,999 | 12,799,999 | 12,799,999 | |||||
Common stock, shares outstanding | 12,799,999 | 12,799,999 | 12,799,999 | 12,799,999 | 12,799,999 | 12,799,999 | ||
Common Stock | ||||||||
Schedule Of Capitalization Equity [Line Items] | ||||||||
Common stock, shares authorized | 1,600,000,000 | |||||||
Common stock, par value | $ / shares | $ 0.001 | |||||||
Right to voting | one vote per share | |||||||
Vote per common stock share | Vote / shares | 1 | |||||||
Common stock, shares outstanding | 134,706,467 | 133,836,242 | 135,617,263 | 134,706,467 | 133,836,242 | 132,315,465 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss Primarily Comprised of Accumulated Foreign Currency Translation (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Total accumulated other comprehensive loss | $ (42) | $ (77) |
Cumulative Foreign Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Total accumulated other comprehensive loss | $ (42) | $ (77) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class B Common Stock | |||
Related Party Transaction [Line Items] | |||
Right to voting | 10 votes per share | ||
LTRIP | |||
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 | 57.50% | ||
Related party transactions | $ 0 | $ 0 | $ 0 |
LTRIP | 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 and Geographic Inform98
Segment and Geographic Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 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 and Geographic Inform99
Segment and Geographic Information - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | $ 321 | $ 439 | $ 424 | $ 372 | $ 316 | $ 421 | $ 391 | $ 352 | $ 1,556 | $ 1,480 | $ 1,492 | ||||||
Adjusted EBITDA | [1] | 331 | 352 | 466 | |||||||||||||
Depreciation | (79) | (69) | (57) | ||||||||||||||
Amortization of intangible assets | (32) | (32) | (36) | ||||||||||||||
Stock-based compensation | (96) | (85) | (72) | ||||||||||||||
Non-cash charitable contribution | [2] | (67) | |||||||||||||||
Other non-recurring expenses | (2) | ||||||||||||||||
Operating income | 9 | 42 | 46 | 27 | 10 | 66 | 47 | 42 | 124 | 166 | 232 | ||||||
Other income (expense), net | (14) | (15) | 7 | ||||||||||||||
Income before income taxes | 110 | 151 | 239 | ||||||||||||||
Provision for income taxes | (129) | [3] | (31) | (41) | |||||||||||||
Net income (loss) | $ (84) | [4] | $ 25 | [4] | $ 27 | [4] | $ 13 | [4] | $ 1 | $ 55 | $ 34 | $ 29 | (19) | 120 | 198 | ||
Non-Hotel Segment | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 360 | 290 | 229 | ||||||||||||||
Operating Segments | Hotel Segment | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 1,196 | 1,190 | 1,263 | ||||||||||||||
Adjusted EBITDA | [1] | 286 | 380 | 472 | |||||||||||||
Operating Segments | Non-Hotel Segment | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenue | 360 | 290 | 229 | ||||||||||||||
Adjusted EBITDA | [1] | 45 | (28) | (6) | |||||||||||||
Corporate and Unallocated | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Depreciation | (79) | (69) | (57) | ||||||||||||||
Amortization of intangible assets | (32) | (32) | (36) | ||||||||||||||
Stock-based compensation | $ (96) | $ (85) | (72) | ||||||||||||||
Non-cash charitable contribution | [2] | (67) | |||||||||||||||
Other non-recurring expenses | $ (2) | ||||||||||||||||
[1] | Includes allocated general and administrative expenses in our Hotel segment of $81 million, $80 million and $85 million; and in our Non-Hotel segment of $42 million, $38 million and $28 million for the years ended December 31, 2017, 2016 and 2015, respectively. | ||||||||||||||||
[2] | During the fourth quarter of 2015, we incurred an expense in the amount of $67 million to reflect a non-cash contribution to The TripAdvisor Charitable Foundation (the “Foundation”), which was recorded to general and administrative expense in our consolidated statement of operations. TripAdvisor had historically funded 2% of its annual operating income before amortization and stock-based compensation. TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount equal to eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under its pledge agreement in December 2015. We settled this obligation in treasury shares based on the fair value of our common stock on the date the treasury shares were issued to the Foundation and therefore given the use of stock to settle the obligation, the amount has been excluded from Adjusted EBITDA. TripAdvisor does not expect to make any future contributions to the Foundation. | ||||||||||||||||
[3] | The year ended December 31, 2017 reflects $67 million of Transition Tax and $6 million of tax expense recorded due to the remeasurement of net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. | ||||||||||||||||
[4] | During the fourth quarter of 2017, we recognized $67 million of Transition Tax and $6 million of tax expense recorded for the remeasurement of our net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. |
Segment and Geographic Infor100
Segment and Geographic Information - Summary of Segment Information (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||
General and administrative | [1] | $ 157 | $ 143 | $ 210 | |||
Transition tax | $ 67 | $ 67 | 67 | ||||
Income tax expense recorded due to remeasurement of net deferred tax assets | $ 6 | 6 | |||||
Non-cash charitable contribution | [2] | $ 67 | |||||
Percent of funded in annual operating income before amortization and stock-based compensation | 2.00% | ||||||
TripAdvisor Charitable Foundation | |||||||
Segment Reporting Information [Line Items] | |||||||
Non-cash charitable contribution | $ 67 | ||||||
Operating Segments | Hotel Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
General and administrative | 81 | 80 | $ 85 | ||||
Operating Segments | Non-Hotel Segment | |||||||
Segment Reporting Information [Line Items] | |||||||
General and administrative | $ 42 | $ 38 | $ 28 | ||||
[1] | Includes stock-based compensation expense as follows: | ||||||
[2] | During the fourth quarter of 2015, we incurred an expense in the amount of $67 million to reflect a non-cash contribution to The TripAdvisor Charitable Foundation (the “Foundation”), which was recorded to general and administrative expense in our consolidated statement of operations. TripAdvisor had historically funded 2% of its annual operating income before amortization and stock-based compensation. TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount equal to eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under its pledge agreement in December 2015. We settled this obligation in treasury shares based on the fair value of our common stock on the date the treasury shares were issued to the Foundation and therefore given the use of stock to settle the obligation, the amount has been excluded from Adjusted EBITDA. TripAdvisor does not expect to make any future contributions to the Foundation. |
Segment and Geographic Infor101
Segment and Geographic Information - Summary of Total Revenue by Source (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from External Customer [Line Items] | |||||||||||
Total revenue | $ 321 | $ 439 | $ 424 | $ 372 | $ 316 | $ 421 | $ 391 | $ 352 | $ 1,556 | $ 1,480 | $ 1,492 |
Hotel Segment | TripAdvisor-Branded Click-Based and Transaction | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenue | 756 | 750 | 837 | ||||||||
Hotel Segment | TripAdvisor-Branded Display-Based Advertising and Subscription | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenue | 292 | 282 | 272 | ||||||||
Hotel Segment | Other Hotel Revenue | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenue | 148 | 158 | 154 | ||||||||
Non-Hotel Segment | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total revenue | $ 360 | $ 290 | $ 229 |
Segment and Geographic Infor102
Segment and Geographic Information - Summary of Revenue by Geographic Area (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Total revenue | $ 321 | $ 439 | $ 424 | $ 372 | $ 316 | $ 421 | $ 391 | $ 352 | $ 1,556 | $ 1,480 | $ 1,492 |
United States | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Total revenue | 877 | 799 | 739 | ||||||||
United Kingdom | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Total revenue | 209 | 210 | 215 | ||||||||
All Other Countries | |||||||||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||||||||
Total revenue | $ 470 | $ 471 | $ 538 |
Segment and Geographic Infor103
Segment and Geographic Information - Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Property and equipment, net | $ 263 | $ 260 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Property and equipment, net | 219 | 222 |
All Other Countries | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Property and equipment, net | $ 44 | $ 38 |
Interest Income and Other, N104
Interest Income and Other, Net - Summary of Interest Income and Other, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Other Income And Expenses [Abstract] | ||||
Net gain (loss), realized and unrealized, on foreign currency exchange and foreign currency derivative contracts and other, net | $ 2 | $ (4) | $ (4) | |
Interest income | 1 | 1 | 1 | |
Loss on cost method investment | (2) | |||
Gain on sale of business | [1] | 20 | ||
Total | $ 1 | $ (3) | $ 17 | |
[1] | Refer to “Note 3 – Acquisitions and Dispositions” for information regarding our gain on sale of business in 2015. |
Quarterly Financial Informat105
Quarterly Financial Information - Summary of Selected Unaudited Financial Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||||||
Year ended December 31, 2017 | |||||||||||||||||||
Revenue | $ 321 | $ 439 | $ 424 | $ 372 | $ 316 | $ 421 | $ 391 | $ 352 | $ 1,556 | $ 1,480 | $ 1,492 | ||||||||
Operating income | 9 | 42 | 46 | 27 | 10 | 66 | 47 | 42 | 124 | 166 | 232 | ||||||||
Net income (loss) | $ (84) | [1] | $ 25 | [1] | $ 27 | [1] | $ 13 | [1] | $ 1 | $ 55 | $ 34 | $ 29 | $ (19) | $ 120 | $ 198 | ||||
Basic earnings (loss) per share | $ (0.60) | [2] | $ 0.18 | [2] | $ 0.19 | [2] | $ 0.09 | [2] | $ 0.01 | [2] | $ 0.38 | [2] | $ 0.23 | [2] | $ 0.20 | [2] | $ (0.14) | $ 0.83 | $ 1.38 |
Diluted earnings (loss) per share | $ (0.60) | [2] | $ 0.18 | [2] | $ 0.19 | [2] | $ 0.09 | [2] | $ 0.01 | [2] | $ 0.37 | [2] | $ 0.23 | [2] | $ 0.20 | [2] | $ (0.14) | $ 0.82 | $ 1.36 |
[1] | During the fourth quarter of 2017, we recognized $67 million of Transition Tax and $6 million of tax expense recorded for the remeasurement of our net deferred tax assets related to the 2017 Tax Act enacted on December 22, 2017. Refer to “Note 10 - Income Taxes” for further information. | ||||||||||||||||||
[2] | Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings per share may not equal the total computed for the year. |
Quarterly Financial Informat106
Quarterly Financial Information - Summary of Selected Unaudited Financial Information (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2017 |
Quarterly Financial Information Disclosure [Abstract] | |||
Transition tax | $ 67 | $ 67 | $ 67 |
Tax expense due to remeasurement of net deferred tax asset | $ 6 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Feb. 02, 2018 | Jan. 31, 2018 | Jan. 25, 2017 | Feb. 15, 2013 |
Subsequent Event [Line Items] | ||||
Authorized the repurchase of shares of common stock | $ 250,000,000 | $ 250,000,000 | ||
Subsequent Event | 2015 Credit Facility | ||||
Subsequent Event [Line Items] | ||||
One-time repatriation of foreign earnings to repay outstanding borrowings | $ 325,000,000 | |||
Subsequent Event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Authorized the repurchase of shares of common stock | $ 250,000,000 |