Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 03, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | TRIPADVISOR, INC. | |
Trading Symbol | TRIP | |
Entity Central Index Key | 0001526520 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 001-35362 | |
Entity Tax Identification Number | 80-0743202 | |
Entity Address, Address Line One | 400 1st Avenue | |
Entity Address, City or Town | Needham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02494 | |
City Area Code | 781 | |
Local Phone Number | 800-5000 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Common Stock, Unclassified | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 121,640,613 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,799,999 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Income Statement [Abstract] | |||||
Revenue (Note 3) | [1] | $ 59 | $ 422 | $ 337 | $ 798 |
Costs and expenses: | |||||
Cost of revenue | [2],[3] | 10 | 27 | 29 | 48 |
Selling and marketing | [3] | 54 | 180 | 179 | 357 |
Technology and content | [3] | 51 | 74 | 120 | 148 |
General and administrative | [3] | 43 | 45 | 94 | 88 |
Depreciation and amortization | 32 | 30 | 64 | 61 | |
Restructuring and other related reorganization costs (Note 10) | 33 | 42 | |||
Total costs and expenses: | 223 | 356 | 528 | 702 | |
Operating income (loss) | (164) | 66 | (191) | 96 | |
Other income (expense): | |||||
Interest expense | (7) | (2) | (9) | (3) | |
Interest income | 1 | 5 | 2 | 9 | |
Other income (expense), net (Note 14) | (9) | (1) | (9) | (1) | |
Total other income (expense), net | (15) | 2 | (16) | 5 | |
Income (loss) before income taxes | (179) | 68 | (207) | 101 | |
(Provision) benefit for income taxes (Note 9) | 26 | (34) | 38 | (41) | |
Net income (loss) | $ (153) | $ 34 | $ (169) | $ 60 | |
Earnings (loss) per share attributable to common stockholders (Note 4): | |||||
Basic | $ (1.14) | $ 0.24 | $ (1.25) | $ 0.43 | |
Diluted | $ (1.14) | $ 0.24 | $ (1.25) | $ 0.43 | |
Weighted average common shares outstanding (Note 4): | |||||
Basic | 134,213 | 139,070 | 135,227 | 138,744 | |
Diluted | 134,213 | 140,805 | 135,227 | 141,037 | |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||||
[2] | Excludes amortization as follows: | ||||
[3] | Includes stock-based compensation expense as follows (Note 5): |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Costs and expenses: | ||||
Amortization adjustment | $ 18 | $ 17 | $ 35 | $ 36 |
Stock-based compensation: | ||||
Stock-based compensation | 25 | 32 | 51 | 60 |
Selling and Marketing | ||||
Stock-based compensation: | ||||
Stock-based compensation | 4 | 6 | 7 | 11 |
Technology and Content | ||||
Stock-based compensation: | ||||
Stock-based compensation | 9 | 14 | 20 | 27 |
General and Administrative | ||||
Stock-based compensation: | ||||
Stock-based compensation | 12 | 12 | 23 | 22 |
Cost of Revenue | ||||
Stock-based compensation: | ||||
Stock-based compensation | 1 | |||
Acquired Technology | ||||
Costs and expenses: | ||||
Amortization of intangible assets | 1 | 2 | 1 | 4 |
Website Development Costs | ||||
Costs and expenses: | ||||
Depreciation | $ 17 | $ 15 | $ 34 | $ 32 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Statement Of Income And Comprehensive Income [Abstract] | |||||
Net income (loss) | $ (153) | $ 34 | $ (169) | $ 60 | |
Other comprehensive income (loss): | |||||
Foreign currency translation adjustments, net of tax | [1] | 11 | (1) | (6) | (3) |
Reclassification adjustment for net losses included in net income (loss) | 1 | 1 | |||
Total other comprehensive income (loss), net of tax | 12 | (1) | (5) | (3) | |
Comprehensive income (loss) | $ (141) | $ 33 | $ (174) | $ 57 | |
[1] | The deferred income tax liability related to foreign currency translation adjustments is not material. |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents (Note 6) | $ 698 | $ 319 |
Accounts receivable and contract assets, net of allowance for credit losses of $32 and $25, respectively (Note 2, Note 3) | 74 | 183 |
Income taxes receivable | 55 | 4 |
Prepaid expenses and other current assets | 26 | 27 |
Total current assets | 853 | 533 |
Property and equipment, net of accumulated depreciation of $347 and $319, respectively | 259 | 270 |
Operating lease right-of-use assets | 63 | 74 |
Intangible assets, net of accumulated amortization of $184 and $173, respectively | 95 | 110 |
Goodwill (Note 7) | 837 | 840 |
Deferred income taxes, net | 6 | 7 |
Non-marketable investments (Note 6) | 41 | 55 |
Other long-term assets, net of allowance for credit losses of $5 and $0, respectively | 95 | 95 |
TOTAL ASSETS | 2,249 | 1,984 |
Current liabilities: | ||
Accounts payable | 13 | 11 |
Deferred merchant payables | 57 | 159 |
Deferred revenue (Note 3) | 38 | 62 |
Accrued expenses and other current liabilities (Note 10) | 141 | 203 |
Total current liabilities | 249 | 435 |
Long-term debt (Note 8) | 700 | |
Deferred income taxes, net | 13 | 8 |
Other long-term liabilities | 375 | 380 |
Total Liabilities | 1,337 | 823 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: (Note 12) | ||
Preferred stock, $0.001 par value Authorized shares: 100,000,000 Shares issued and outstanding: 0 and 0 | ||
Additional paid-in capital | 1,193 | 1,150 |
Retained earnings | 509 | 681 |
Accumulated other comprehensive income (loss) | (68) | (63) |
Treasury stock-common stock, at cost, 18,844,614 and 14,116,534 shares, respectively | (722) | (607) |
Total Stockholders’ Equity | 912 | 1,161 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,249 | $ 1,984 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for credit losses | $ 32 | $ 25 |
Property and equipment, net, accumulated depreciation | 347 | 319 |
Intangible assets, accumulated amortization | 184 | 173 |
Other long-term assets, allowance for credit losses | $ 5 | $ 0 |
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 | 140,412,251 | 138,698,307 |
Common stock, shares outstanding | 121,567,637 | 124,581,773 |
Treasury stock, shares | 18,844,614 | 14,116,534 |
Class B Common Stock | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 12,799,999 | 12,799,999 |
Common stock, shares outstanding | 12,799,999 | 12,799,999 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, AdjustmentRevision of Prior Period, Adjustment | Class B Common Stock | Common Stock | Common StockClass B Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, AdjustmentRevision of Prior Period, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Beginning balance at Dec. 31, 2018 | $ 1,471 | $ 1,037 | $ 1,043 | $ (62) | $ (547) | |||||
Beginning balance, shares at Dec. 31, 2018 | 137,158,010 | 12,799,999 | (12,056,688) | |||||||
Net income (loss) | 60 | 60 | ||||||||
Cumulative effect adjustment from adoption of new accounting guidance at Dec. 31, 2018 | $ 3 | $ 3 | ||||||||
Other comprehensive income (loss) | (3) | (3) | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs | $ 1 | 1 | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 1,367,148 | |||||||||
Repurchase of common stock, shares | 0 | |||||||||
Withholding taxes on net share settlements of equity awards | $ (26) | (26) | ||||||||
Stock-based compensation | 69 | 69 | ||||||||
Ending balance at Jun. 30, 2019 | 1,575 | 1,081 | 1,106 | (65) | $ (547) | |||||
Ending balance, shares at Jun. 30, 2019 | 138,525,158 | 12,799,999 | (12,056,688) | |||||||
Beginning balance at Mar. 31, 2019 | 1,507 | 1,046 | 1,072 | (64) | $ (547) | |||||
Beginning balance, shares at Mar. 31, 2019 | 138,256,630 | 12,799,999 | (12,056,688) | |||||||
Net income (loss) | 34 | 34 | ||||||||
Other comprehensive income (loss) | (1) | (1) | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs | $ 1 | 1 | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 268,528 | |||||||||
Repurchase of common stock, shares | 0 | |||||||||
Withholding taxes on net share settlements of equity awards | $ (4) | (4) | ||||||||
Stock-based compensation | 38 | 38 | ||||||||
Ending balance at Jun. 30, 2019 | 1,575 | 1,081 | 1,106 | (65) | $ (547) | |||||
Ending balance, shares at Jun. 30, 2019 | 138,525,158 | 12,799,999 | (12,056,688) | |||||||
Beginning balance at Dec. 31, 2019 | $ 1,161 | 1,150 | 681 | (63) | $ (607) | |||||
Beginning balance, shares at Dec. 31, 2019 | 124,581,773 | 12,799,999 | 138,698,307 | 12,799,999 | (14,116,534) | |||||
Net income (loss) | $ (169) | (169) | ||||||||
Cumulative effect adjustment from adoption of new accounting guidance at Dec. 31, 2019 | 681 | $ (3) | $ (3) | |||||||
Other comprehensive income (loss) | (5) | (5) | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 1,713,944 | |||||||||
Repurchase of common stock | $ (115) | $ (115) | ||||||||
Repurchase of common stock, shares | (4,707,450) | (4,707,450) | ||||||||
Withholding taxes on net share settlements of equity awards | $ (17) | (17) | ||||||||
Stock-based compensation | 60 | 60 | ||||||||
Other, shares | (20,630) | |||||||||
Ending balance at Jun. 30, 2020 | $ 912 | 1,193 | 509 | (68) | $ (722) | |||||
Ending balance, shares at Jun. 30, 2020 | 121,567,637 | 12,799,999 | 140,412,251 | 12,799,999 | (18,844,614) | |||||
Beginning balance at Mar. 31, 2020 | $ 1,027 | 1,167 | 662 | (80) | $ (722) | |||||
Beginning balance, shares at Mar. 31, 2020 | 12,799,999 | 140,109,681 | (18,823,984) | |||||||
Net income (loss) | (153) | (153) | ||||||||
Other comprehensive income (loss) | $ 12 | 12 | ||||||||
Issuance of common stock related to exercises of options and vesting of RSUs, shares | 302,570 | |||||||||
Repurchase of common stock, shares | 0 | |||||||||
Withholding taxes on net share settlements of equity awards | $ (3) | (3) | ||||||||
Stock-based compensation | 29 | 29 | ||||||||
Other, shares | (20,630) | |||||||||
Ending balance at Jun. 30, 2020 | $ 912 | $ 1,193 | $ 509 | $ (68) | $ (722) | |||||
Ending balance, shares at Jun. 30, 2020 | 121,567,637 | 12,799,999 | 140,412,251 | 12,799,999 | (18,844,614) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities: | ||
Net income (loss) | $ (169) | $ 60 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 64 | 61 |
Stock-based compensation expense (Note 5) | 51 | 60 |
Deferred income tax expense | 6 | 17 |
Provision for expected credit losses and other, net | 24 | 6 |
Changes in operating assets and liabilities, net of effects from acquisitions and other investments: | ||
Accounts receivable and contract assets, prepaid expenses and other assets | 95 | (61) |
Accounts payable, accrued expenses and other liabilities | (46) | (1) |
Deferred merchant payables | (100) | 183 |
Income tax receivables/payables, net | (50) | 3 |
Deferred revenue | (23) | 35 |
Net cash provided by (used in) operating activities | (148) | 363 |
Investing activities: | ||
Capital expenditures, including internal-use software and website development | (36) | (38) |
Purchases of marketable securities | (69) | |
Maturities of marketable securities | 20 | |
Other investing activities, net | 2 | |
Net cash used in investing activities | (34) | (87) |
Financing activities: | ||
Repurchase of common stock (Note 12) | (115) | |
Proceeds from exercise of stock options | 1 | |
Payment of withholding taxes on net share settlements of equity awards | (17) | (26) |
Payments of finance lease obligation | (3) | (3) |
Net cash provided by (used in) financing activities | 561 | (28) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | |
Net increase in cash, cash equivalents and restricted cash | 379 | 246 |
Cash, cash equivalents and restricted cash at beginning of period | 319 | 655 |
Cash, cash equivalents and restricted cash at end of period | 698 | $ 901 |
2015 Credit Facility | ||
Financing activities: | ||
Proceeds from credit facility | 700 | |
Payment of financing costs from 2015 credit facility (Note 8) | $ (4) |
Business Description and Basis
Business Description and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation | NOTE 1: BUSINESS DESCRIPTION AND BASIS OF PRESENTATION We refer to Tripadvisor, Inc. and our wholly-owned subsidiaries as “Tripadvisor”, “the Company”, “us”, “we” and “our” in these notes to the unaudited condensed consolidated financial statements. Description of Business Tripadvisor is a leading online travel company and our mission is to help people around the world plan, book and experience the perfect trip. We operate a global travel platform that connects the world’s largest audience of prospective travelers with travel partners through rich content, price comparison tools, and online reservation and related services for destinations, accommodations, travel activities and experiences, and restaurants . Under our flagship brand, Tripadvisor, we launched www.Tripadvisor.com in the U.S. in 2000. Since then, we have launched localized versions of the Tripadvisor website in 48 Tripadvisor’s rich content and engaged community attract the world’s largest travel audience, based on monthly unique visitors, including 463 million average monthly unique visitors in the third quarter of 2019 during the peak summer travel season . In addition to the flagship Tripadvisor brand, we own and operate a portfolio of travel media brands and businesses, operating under various websites, including the following: www.bokun.io, www.cruisecritic.com, www.flipkey.com, www.thefork.com (including www.lafourchette.com, www.eltenedor.com, www.bookatable.co.uk, and www.delinski.com), www.helloreco.com, www.holidaylettings.co.uk, www.housetrip.com, www.jetsetter.com, www.niumba.com, www.seatguru.com, www.singleplatform.com, www.vacationhomerentals.com, and www.viator.com. Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has 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’ financial results were not material for all periods presented. Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. As of June 30, 2020, Liberty TripAdvisor Holdings, Inc. (“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 14.9% 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 23.0% of the outstanding common stock. Because each share of Class B common stock 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 % of our voting power. We had no related party transactions with LTRIP during the three and six months ended June 30, 2020 and 2019, respectively. Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact our results of operations. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. Risks and Uncertainties In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China, and on March 11, 2020 was declared a global pandemic. We are subject to risks and uncertainties as a result of the COVID-19 pandemic. COVID-19 has caused material declines in demand within the travel, hospitality, restaurant, and leisure industry. The pandemic’s proliferation, concurrent with travel bans, increased governmental restrictions and mandates globally, to limit the spread of the virus, has dampened consumer demand for our products and services, which has adversely and materially affected our business, results of operations and financial condition. We believe the travel industry and our business will continue to be adversely and materially affected while travel bans and other government restrictions and mandates continue to remain in place. However, the extent of the impact of the COVID-19 pandemic on our business remains highly uncertain and difficult to predict, as the response to the pandemic continues to be ongoing and shifting as information is rapidly evolving, and the duration and severity of the pandemic are also uncertain and cannot be predicted. In addition, we do not have visibility into when these bans will be lifted, where additional bans may be initiated, or where bans that have been previously lifted are reinstated due to resurgence of virus, nor do we have visibility into the changes to consumer usage patterns on our platform or travel behavior patterns when travel bans and other government restrictions and mandates are fully lifted. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a protracted local and/or global economic recession. Such economic disruption could have a material adverse effect on our business as consumers reduce their discretionary spending. Policymakers around the globe have responded with fiscal policy actions to support certain areas of the travel industry and economy as a whole. The magnitude and overall effectiveness of these actions remains uncertain. The Company's future results of operations and liquidity could also be adversely impacted by delays in payments of outstanding accounts receivable amounts beyond normal payment terms, travel supplier and restaurant insolvencies, and the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by the Company and its customers. As of the date of issuance of these unaudited condensed consolidated financial statements, the extent and duration to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations in the future continues to be uncertain. Seasonality Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partners’ advertising investments, and therefore our revenue and profits, have also historically followed a seasonal pattern. Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, traveler hotel and rental stays, and travel activities and experiences taken, compared to the first and fourth quarters, which represent seasonal low points. Significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. In addition, due to the impact of COVID-19 to our business, we did not experience our typical seasonal pattern for revenue and profit during the three months ended June 30, 2020. In addition, cash outflows to travel suppliers related to deferred merchant payables significantly exceeded cash received from travelers during the first six months of 2020, reflecting the decline in consumer demand for our products and cancellations of reservations related to COVID-19, contributing significantly to unfavorable working capital trends and material negative operating cash flow during the six months ended June 30, 2020. It is difficult to forecast the seasonality for the upcoming quarters, given the uncertainty related to the extent and duration of the impact from COVID-19 and the s hape and timing of a recovery. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies With the exception of the change for the accounting of credit losses as a result of adopting ASC 326 – Financial Instruments – Credit Losses Significant Accounting Policies Recently Adopted Credit Losses In June 2016, the FASB issued new accounting guidance which replaces the incurred loss impairment model with an expected loss methodology on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, notes 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. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Company adopted ASC 326 on January 1, 2020, using a modified retrospective transition method for all financial assets measured at amortized cost, which requires a cumulative-effect adjustment of initial application, if any, to be recognized on the date of adoption. The cumulative-effect adjustment recorded by the Company on January 1, 2020 to retained earnings on its unaudited condensed consolidated balance sheet was $3 million. Financial results for reporting periods beginning after January 1, 2020 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous GAAP. During the three and six months ended June 30, 2020, the impact of adopting the expected credit loss model was not material to the Company. Credit loss estimates on accounts receivable are recorded in general and administrative expenses on our unaudited condensed consolidated statement of operations. Credit loss estimates on available-for-sale debt securities are recorded in interest expense on our unaudited condensed consolidated statement of operations. The Company has updated its significant accounting policies as described below as of January 1, 2020. Accounts Receivable and Allowance for Credit Losses. The Company historically recorded an allowance for doubtful accounts using the incurred loss model. Upon adoption of ASC 326, the Company transitioned to the “expected credit loss” methodology in estimating its allowance for credit losses. We apply the “expected credit loss” methodology by first assessing our historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to the Company’s ability to collect its outstanding accounts receivables, or the expectation for future losses. The Company develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’ ability to fulfill their payment obligations, and assessing broader economic conditions that may impact our customers’ ability to pay their obligations. Where appropriate, the Company performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and we have concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by the Company, based on our collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. We recognize a greater credit loss allowance on the accounts receivable due from those customers in the lower credit tranche, as determined by the Company. When the Company becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses . The Company's exposure to credit losses may increase if our customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, including the economic impact to our customers associated with COVID-19, or other customer-specific factors. Available-for-sale debt securities. The Company's investment portfolio at any point in time may contain investments in U.S. treasury and U.S. government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S. government agency securities, cash and term deposits, and money market funds. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero loss expectation for U.S. treasury and U.S. government agency securities. The Company regularly reviews the securities in an unrealized loss position and evaluates the expected credit loss risk by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of June 30, 2020, the Company had no available-for-sale-debt securities . |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | NOTE 3: REVENUE RECOGNITION We generate all of our revenue from contracts with customers. We recognize revenue when we satisfy a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. When we act as an agent in the transaction, we recognize revenue for only our commission on the arrangement. We determine revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, we satisfy a performance obligation At contract inception, we assess the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, we consider all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. We have provided qualitative information about our performance obligations for our principal revenue streams discussed below. There was no significant revenue recognized in the three and six months ended June 30, 2020 and 2019 related to performance obligations satisfied in prior periods, respectively. We have applied a practical expedient and do not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and we do not have any material unsatisfied performance obligations over one year. The value related to our remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. Our timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component. Our customer invoices are generally due 30 days from the time of invoicing. The application of our revenue recognition policies and a description of our principal activities, organized by segment, from which we generate our revenue, are presented below. Hotels, Media & Platform Segment Tripadvisor-branded Hotels Revenue . Our largest source of Hotels, Media & Platform 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’ websites. Our click-based travel partners are predominantly OTAs and hotels. Click-based advertising is generally priced on a cost-per-click, or “CPC”, basis, with payments from travel partners determined by the number of travelers who click on a link multiplied by the CPC rate for each specific click. CPC rates are determined in a dynamic, competitive auction process, also known as hotel auction revenue, where our travel partner CPC bids for rates and availability to be listed on our site are submitted. When a CPC bid is submitted, the partner agrees to pay us the bid amount each time a traveler clicks on the link to that partner’s websites. Bids can be submitted periodically – as often as daily – on a property-by-property basis. We record click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner websites as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service. In addition, we offer subscription-based advertising to hotel partners, owners of B&Bs and other specialty lodging properties. Our performance obligation is generally to enable subscribers to advertise their businesses on our website, as well as to manage and promote their website URL, email address, phone number, special offers and other information related to their business. Subscription-based advertising services are predominantly sold for a flat fee for a contracted period of time of one year or less and revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. Subscription-based advertising services are generally billed at the inception of the service. When prepayments are received, we recognize deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. We also offer travel partners the opportunity to advertise and promote their business through hotel sponsored placements on our websites. This service is generally priced on a CPC basis, with payments from travel partners determined by the number of travelers who click on the sponsored link multiplied by the CPC rate for each specific click. CPC rates for hotel sponsored placements that our travel partners pay are based on a pre-determined contractual rate. We record this click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner as our performance obligation is fulfilled at that time. Hotel sponsored placements revenue is generally billed to our travel partners on a monthly basis consistent with the timing of the service. To a lesser extent, we generate revenue from our cost-per-action, or “CPA” model, which consists of contextually-relevant booking links to our travel partners’ websites which are advertised on our platform. We earn a commission from our travel partners, based on a pre-determined contractual commission rate, for each traveler who clicks to and books a hotel reservation on the travel partners’ website, which results in a traveler stay. CPA revenue is billable only upon the completion of each traveler’s stay resulting from a hotel reservation. The travel partners provide the service to the travelers and we act as an agent under ASC 606. Our performance obligation is complete at the time of the hotel reservation booking, and the commission earned is recognized upon booking, as we have no post-booking service obligations. Revenue recognized under the CPA model requires an estimate of the impact of cancellations using historical cancellation rates at the time of booking. Contract assets are recognized at the time of booking for commissions that are billable at the time of stay. Tripadvisor-branded Display and Platform Revenue . We offer travel partners the ability to promote their brands through display-based advertising placements on our websites across all of our segments and business units. Our display-based advertising clients are predominantly 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. The performance obligation in our display-based advertising arrangements is to display a number of advertising impressions on our websites and we recognize revenue for impressions as they are delivered. Services are generally billed monthly. We have applied the practical expedient to measure progress toward completion, as we have the right to invoice the customer in an amount that directly corresponds with the value to the customer of our performance to date, which is measured based on impressions delivered. Experiences & Dining Segment We provide information and services that allow consumers to research and book activities and attractions in popular travel destinations both through Viator, our dedicated Experiences offering, and on our Tripadvisor website and mobile apps. We also power travel activities and experiences booking capabilities to consumers on affiliate partner websites, including some of the world’s top airlines, hotel chains, and online and offline travel agencies. We work with local tour or travel activities/experiences operators (“the supplier”) to provide consumers the ability to book tours, activities and experiences (“the activity”) in popular destinations worldwide. We generate commissions for each booking transaction we facilitate through our online reservation system. We provide post-booking service to the customer until the time of the activity, which is the completion of the performance obligation. Revenue is recognized at the time that the activity occurs. We generally do not control the activity before the We do not control the service and act as an agent for these transactions under ASC 606. We also provide information and services for consumers to research and book restaurants in popular travel destinations through our dedicated restaurant reservations offering, TheFork, and on our Tripadvisor-branded websites and mobile apps. TheFork is an online restaurant booking platform operating on a number of websites (including www.thefork.com, www.lafourchette.com, www.eltenedor.com, and www.bookatable.co.uk reservation is fulfilled, or as diners are seated by our restaurant customers. We invoice restaurants monthly for transaction fees. To a lesser extent, we also generate subscription fees for subscription-based advertising to restaurants, access to certain online reservation management services, marketing analytic tools, and menu syndication services provided by TheFork and Tripadvisor. As the performance obligation is to provide restaurants with access to these services over the subscription period , subscription fee revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. Subscription fees are generally billable in advance of service. When prepayments are received, we recognize deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. In addition, we also offer restaurant partners the opportunity to advertise and promote their business through restaurant media advertising placements on our website. This service is generally priced on a CPC basis, with payments from restaurant partners determined by the number of users who click on the sponsored link multiplied by the CPC rate for each specific click. CPC rates for media advertising placements that our restaurant partners pay are based on a pre-determined contractual rate. We record this click-based advertising revenue as the click occurs and diner leads are sent to the restaurant partner as our performance obligation is fulfilled at that time. Click-based revenue is generally billed to our restaurant partners on a monthly basis consistent with the timing of the service. Other We provide information and services that allow travelers to research and book vacation and short-term rental properties, including full homes, condominiums, villas, beach properties, cabins and cottages. Our Rentals offering generates revenue primarily by offering individual property owners and managers the ability to list their properties on our websites and mobile apps thereby connecting with travelers through a free-to-list, commission-based option or, 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 apps. We earn commissions associated with rental transactions through our free-to-list model from both the traveler, and the property owner or manager. We provide post-booking service to the travelers, property owners and managers until the time the rental commences, which is the time the performance obligation is completed. Revenue from transaction fees is recognized at the time that the rental commences. We act as an agent, under ASC 606, in the transactions as we do not control any properties before the property owner provides the accommodation to the traveler and do not have inventory risk. In addition, We disaggregate revenue from contracts with customers into major products/revenue sources. We have determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in “Note 13: Segment Information, (1) Hotels, Media & Platform; and (2) Experiences & Dining Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Major products/revenue sources (1): (in millions) Hotels, Media & Platform Tripadvisor-branded hotels $ 31 $ 211 $ 168 $ 427 Tripadvisor-branded display and platform 7 43 39 81 Total Hotels, Media & Platform 38 254 207 508 Experiences & Dining 14 125 97 206 Other (2) 7 43 33 84 Total Revenue $ 59 $ 422 $ 337 $ 798 (1) Our revenue is recognized primarily at a point in time for all reported segments. (2) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment The following table provides information about the opening and closing balances of accounts receivable and contract assets from contracts with customers (in millions): June 30, 2020 December 31, 2019 Accounts receivable 69 176 Contract assets 5 7 Total $ 74 $ 183 Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that we have transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. During the three and six months ended June 30, 2020, we recorded approximately $7 million and $10 million, respectively, of incremental allowance for expected uncollectible amounts of accounts receivable and contract assets, when compared to the same periods in 2019, respectively, including estimated future losses in consideration of the impact of COVID-19 pandemic on the economy and the Company. Actual future bad debt could differ materially from this estimate resulting from changes in our assumptions of the duration and severity of the impact of the COVID-19 pandemic. Contract liabilities generally include payments received in advance of performance under the contract, and are realized as revenue as the performance obligation to the customer is satisfied, which we present as deferred revenue on our consolidated balance sheets. As of January 1, 2020, we had $62 million recorded as deferred revenue on our unaudited condensed consolidated balance sheet, of which $12 million and $44 million were recognized as revenue and $4 million and $10 million were refunded due to cancellations by travelers during the three and six months ended June 30, 2020, respectively. As of January 1, 2019, we had $63 million recorded as deferred revenue on our unaudited condensed consolidated balance sheet, of which $12 million and $46 million were recognized as revenue and $1 million and $2 million were refunded due to cancellations by travelers during the three and six months ended June 30, 2019, respectively. The difference between the opening and closing balances of our deferred revenue primarily results from the timing differences between when we receive customer payments and the time in which we satisfy our performance obligations. The difference between the opening and closing balances of our contract assets primarily results from the timing difference between when we satisfy our performance obligations and the time when the principal completes the service in the transaction. There were no significant changes in contract assets or deferred revenue during the three and six months ended June 30, 2020 and 2019 related to business combinations, impairments, cumulative catch-ups or other material adjustments. However, to the extent the COVID-19 pandemic continues, we may incur additional significant and unanticipated cancellations by consumers related to future travel, accommodations and tour bookings, which have been reserved by travelers and recorded as deferred revenue on our consolidated balance sheet as of June 30, 2020 and December 31, 2019 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 4: EARNINGS PER SHARE Basic Earnings Per Share Attributable to Common Stockholders We compute basic earnings per share, or Basic EPS, by dividing net income (loss) 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, includes 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 EPS 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, primarily related to stock options and the vesting of restricted stock units using the treasury stock method; and (iii) if dilutive, performance-based and market-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, such as for the three and six months ended June 30, 2020, Diluted EPS is the same as Basic EPS, since dilutive common equivalent shares are not assumed to have been issued if their effect is antidilutive. Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (153 ) $ 34 $ (169 ) $ 60 Denominator: Weighted average shares used to compute Basic EPS 134,213 139,070 135,227 138,744 Weighted average effect of dilutive securities: Stock options — 187 — 296 RSUs/MSUs — 1,548 — 1,997 Weighted average shares used to compute Diluted EPS 134,213 140,805 135,227 141,037 Basic EPS $ (1.14 ) $ 0.24 $ (1.25 ) $ 0.43 Diluted EPS $ (1.14 ) $ 0.24 $ (1.25 ) $ 0.43 Potential common shares, consisting of outstanding stock options, service and performance-based restricted stock units (“RSUs”) and market-based restricted stock units (“MSUs”), totaling approximately 14.2 million shares and 15.6 million shares for the three and six months ended June 30, 2020, respectively, and approximately 6.1 million shares and 4.8 million shares for the three and six months ended June 30, 2019, respectively, have been excluded from the calculation of Diluted EPS because their effect would have been antidilutive. In addition, potential common shares of certain performance-based awards of approximately 0.7 million shares for both the three and six months ended June 30, 2020, respectively, and approximately 0.5 million shares for both the three and six months ended June 30, 2019, respectively, 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. In addition, our non-vested RSUs are entitled to dividend equivalents, which will be payable to the holder subject to, and upon vesting of, the underlying awards and are therefore forfeitable. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two‑class method of determining earnings per share. |
Stock Based Awards and Other Eq
Stock Based Awards and Other Equity Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Based Awards and Other Equity Instruments | NOTE 5: 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 on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (in millions) (in millions) Cost of revenue $ — $ — $ 1 $ — Selling and marketing 4 6 7 11 Technology and content 9 14 20 27 General and administrative 12 12 23 22 Total stock-based compensation expense 25 32 51 60 Income tax benefit from stock-based compensation (5 ) (8 ) (12 ) (14 ) Total stock-based compensation expense, net of tax $ 20 $ 24 $ 39 $ 46 We capitalized $4 million and $8 million of stock-based compensation expense as internal-use software and website development costs during the three and six months ended June 30, 2020, respectively, and $5 million and $9 million during the three and six months ended June 30, 2019, respectively. Stock-Based Award Activity and Valuation 2020 Stock Option Activity A summary of our stock option activity, consisting primarily of service-based non-qualified stock options, during the six months ended June 30, 2020, 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, 2019 6,017 $ 50.27 Granted 1,095 25.38 Exercised (2 ) 17.08 Cancelled or expired (732 ) 46.74 Options outstanding at June 30, 2020 6,378 $ 46.42 5.8 $ — Exercisable as of June 30, 2020 3,630 $ 55.30 3.9 $ — Vested and expected to vest after June 30, 2020 (1) 6,378 $ 46.42 5.8 $ — ( 1 ) 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 June 30, 2020 was $19.01. The total intrinsic value of stock options exercised for the six months ended June 30, 2020 and 2019 was not material and $2 million, respectively. The fair value of stock option grants 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: Six months ended June 30, 2020 2019 Risk free interest rate 1.18 % 2.42 % Expected term (in years) 5.30 5.19 Expected volatility 43.13 % 42.17 % Expected dividend yield — % — % Weighted-average grant date fair value $ 10.11 $ 21.80 The total fair value of stock options vested was $11 million and $10 million for the six months ended June 30, 2020 and 2019, respectively. 20 20 RSU Activity A summary of our RSU activity during the six months ended June 30, 2020 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, 2019 8,469 $ 45.42 Granted 4,834 25.20 Vested and released (1) (2,397 ) 47.67 Cancelled (2,858 ) 38.00 Unvested RSUs outstanding as of June 30, 2020 8,048 $ 34.96 $ 153 (1) Inclusive of 628,545 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the Tripadvisor, Inc. 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. On May 8, 2020, the Company entered into an amended employment agreement (“Amendment”) with Ernst Teunissen, the Company’s Chief Financial Officer and Senior Vice President. The Amendment, among other things, provides for a target payment (“Bonus Award”) in an amount equal to the difference between a maximum payment of $7 million and the aggregate intrinsic value of Mr. Teunissen’s RSU and stock options that vest between May 1, 2020 and May 31, 2022 (the “Target Period”), as measured using the average market price of the Company’s common stock for ten trading days immediately prior to May 31, 2022. On a quarterly basis, management estimates the Bonus Award and accrues this amount ratably over the Target Period. As of June 30, 2020, this amount is classified in other long-term liabilities on the unaudited condensed consolidated balance sheet, and is not material. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. On May 27, 2020, the Compensation Committee of the Board of Directors, approved a modification to the Company’s annual RSU grant issued to its employees in the first quarter of 2020, which consisted of reducing the original grant-date vesting period from four years to two years. This modification resulted in the acceleration and recognition of an additional $10 million of stock-based compensation expense during the three months ended June 30, 2020, given the modified vesting term. There was no change to the original fair value of the impacted RSUs as a result of this modification. This modification did not apply to the RSU grant to Mr. Teunissen in light of the separate arrangement, as described above. A summary of our MSU activity during the six months ended June 30, 2020 is presented below: Weighted Average Grant- Aggregate MSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested MSUs outstanding as of December 31, 2019 389 $ 40.99 Granted (1) 133 28.15 Vested and released ― ― Cancelled (24 ) 58.63 Unvested MSUs outstanding as of June 30, 2020 498 $ 36.71 $ 9 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of the Nasdaq Composite Total Return Index. Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200% of the target number of MSUs originally granted, or to be issued none at all. These MSUs were granted under the 2018 Plan. 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 our MSU awards. The estimated grant-date fair value of these awards is being amortized on a straight-line basis over the requisite service period through December 31, 202 2 . Total current income tax benefits associated with the exercise or settlement of Tripadvisor stock-based awards held by our employees was $1 million and $13 million during the three and six months ended June 30, 2020, respectively, and $3 million and $22 million during the three and six months ended June 30, 2019, respectively. Unrecognized Stock-Based Compensation A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2020 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 29 $ 212 Weighted average period remaining (in years) 2.7 2.1 |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Investments All Other Investments [Abstract] | |
Financial Instruments and Fair Value Measurements | NOTE 6: FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels: 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. Cash Equivalents and Marketable Securities The following table shows our cash equivalents and marketable securities that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on Amortized Cost Fair Value (1) Cash and Cash Equivalents Level 2: Term deposits $ 115 $ 115 $ 115 Total $ 115 $ 115 $ 115 (1) Unrealized gains or losses related to our cash equivalents were not material. Our cash and cash equivalents consist of cash and term deposits on hand in global financial institutions with maturities of 90 days or less at the date of purchase. We had no outstanding investments classified as either short-term or long-term marketable securities, as of June 30, 2020 and December 31, 2019, respectively, and no material realized gains or losses related to the sales of any marketable securities during and for the three and six months ended June 30, 2020 and 2019. We classify our cash equivalents and marketable securities within Level 1 and Level 2 as we value these financial instruments using quoted market prices (Level 1) or alternative pricing sources (Level 2). The valuation technique we use to measure the fair value of money market funds is 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. Derivative Financial Instruments of foreign currency exchange rate fluctuations on our cash flows. For the three and six months ended June 30, 2020 and 2019, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. Our outstanding or unsettled forward contracts are carried at fair value on our unaudited condensed consolidated balance sheets. 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. We recognize any gain or loss resulting from the change in fair value of our foreign currency forward contracts in other income (expense), net on our unaudited condensed consolidated statement of operations which was not material for the three months ended June 30, 2020 . We recorded a net gain of $ 1 million for the six months ended June 30 , 2020 related to our forward contracts. These amount s w ere not material for both the three and six months ended June 30 , 2019 , respectively . The following table shows the notional principal amounts of our outstanding derivative instruments as of the periods presented: June 30, 2020 December 31, 2019 (in millions) Foreign currency exchange - forward contracts (1) (2) $ — $ 10 (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 June 30, 2020 and one outstanding derivative contract as of December 31, 2019. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. (2) The fair value of our outstanding derivative as of December 31, 2019 was not material. Counterparties to our outstanding forward contracts 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. We do not use derivatives for trading or speculative purposes. We had not entered into any cash flow, fair value or net investment hedges as of June 30, 2020 or December 31, 2019. Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include accounts receivable and contract assets, accounts payable, deferred merchant payables, accrued expenses and other current liabilities, and long-term debt. The carrying amount of these financial instruments, with the exception of long-term debt, approximate their fair value because of the short maturity of these instruments as reported on our unaudited condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively. The carrying value of long-term debt from our 2015 Credit Facility bears interest at a variable rate, and therefore is also considered to approximate its fair value. The Company did not have any material assets or liabilities measured at fair value on a recurring basis using the Level 3 unobservable inputs at both June 30, 2020 and December 31, 2019. Risks and Concentrations Our business is subject to certain financial risks and concentrations, including concentration related to dependence on our relationships with our customers. For the year ended December 31, 2019 our two most significant travel partners, Expedia (and its subsidiaries) and Booking (and its subsidiaries), each accounted for more than 10% of our consolidated revenue and combined accounted for 33%, respectively, of our consolidated revenue, with nearly all of this revenue concentrated in our Hotels, Media & Platform segment. Financial instruments, which potentially subject us to concentration of credit risk at any point in time, generally consist primarily of cash and cash equivalents, corporate debt securities, forward 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 pounds, and Australian dollars, as well as money market funds and term deposits. 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. Forward contracts are transacted with major international financial institutions with high credit standings, which to date, have typically had maturities of less than 90 days. Our overall credit risk related to accounts receivable is mitigated by the relatively short collection period. Non-Marketable Investments Equity Securities Accounted for under the Equity Method The Company owns a 40% equity investment in Chelsea Investment Holding Company PTE Ltd, which is majority owned by Ctrip Investment Holding Ltd, a majority-owned subsidiary of Trip.com Group Limited. The Company determined it has the ability to exercise significant influence over the investee, and therefore recorded an equity method investment with a carrying value of $ 39 million and $ 41 million as of June 30 , 2020 and December 31, 2019, respectively, and is included in non-marketable investments on our unaudited condensed consolidated balance sheet . Due to the C O VI D -19 pandemic, we performed a qualitative assessment to evaluate whether our equity investment is impaired. During the three and six months ended June 30 , 2020, we did not record any impairment loss on this equity investment. Investments in Privately-Held Companies We hold investments in equity securities of privately-held companies, which are typically at an early stage of the business cycle and do not have a readily determinable fair value. As of June 30, 2020 and December 31, 2019, the total carrying value of our investments was $2 million and $14 million, respectively, and included in non-marketable investments on our unaudited condensed consolidated balance sheet. During the three months ended June 30, 2020, the Company redeemed an existing equity investment in a privately-held company with a carrying value of $10 million in return for a collateralized note receivable for the same amount. Refer to section entitled “Other Long-Term Assets” below for additional information. Our policy is to measure these 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 such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. During the three and six months ended June 30, 2020 and 2019, we did not record any impairment loss on these equity investments or note any observable price change indicators. Other Long-Term Assets During the three months ended June 30, 2020, the Company was issued collateralized notes (the “Notes Receivable”) with a total principal amount of $20 million from a privately-held company, in exchange for an existing equity investment held in the investee by the Company, and other-long term receivables, net, which the Company held due from the same investee. Refer to the section entitled “Investments in Privately-Held Companies” above for further information. The Company classified the Notes Receivable as held-to-maturity, as the Company has concluded it has the positive intent and ability to hold the Notes Receivable until maturity, with 50% due in 5 years and remaining 50% due in 10 years from issuance date. The Company recorded a $3 million allowance for credit loss under ASC 326 during the three months ended June 30, 2020 in other income (expense), net on the unaudited condensed consolidated statement of operations, related to the Notes Receivable. As of June 30, 2020, the carrying value of the Notes Receivable was $14 million, net of accumulated allowance for credit losses, and is classified in other long-term assets on our unaudited condensed consolidated balance sheet at amortized cost. On a quarterly basis, we perform a qualitative assessment considering impairment indicators to evaluate whether the Notes Receivable are impaired and monitor for changes to our allowance for credit losses. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 7: 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. 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. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach. The Company reorganized its reporting units pursuant to an internal restructuring during the three months ended June 30, 2020. Following the internal restructuring changes, our legacy Dining and Flights/Cruises/Car reporting units were reorganized into four new distinct reporting units: (1) TheFork, (2) Tripadvisor Restaurants, (3) Flights & Car, and (4) Cruises, for the purposes of goodwill impairment testing. As a result, we first performed a qualitative assessment on our historical Dining and Flights/Cruise/Car reporting units prior to implementing the revised reporting unit structure and determined that it was more likely than not that the fair value of these reporting units was greater than the carrying value; which was consistent with our conclusion in the fourth quarter of 2019. We then performed a goodwill impairment test for each of the new reporting units using a quantitative assessment. We concluded the estimated fair values were in excess of the carrying values for each of the four new reporting units. We also performed sensitivity analyses, such as calculating estimated fair values using different rates for the weighted-average cost of capital and long-term rates of growth in the income approach and different revenue/income multiples in our market approach and the estimated fair values remained in excess of the carrying values. Therefore, no indications of impairment were identified as a result of these changes as of June 30, 2020. In addition, as a result of internal restructuring and the sale of its SmarterTravel business during the second quarter of 2020, our SmarterTravel reporting unit no longer exists. The sale of this business was not a material disposition. This change in reporting units had no impact on the composition of our operating segments, or the information that the CODM reviews to evaluate the financial performance of the Company’s operating segments . In addition, the Company conducted a thorough evaluation of relevant events and circumstances that could have impacted the fair value of each of our historical reporting units as of June 30, 2020. As part of this evaluation, it was noted that as of June 30, 2020 the Company’s market capitalization remained in excess of its book value. The Company also observed our most recently completed goodwill impairment analyses indicated significant excess fair values over carrying values across the different reporting units. In addition, the Company considered the change to reporting unit carrying values since the fourth quarter of 2019, and also performed targeted sensitivity analysis on previous assessments, which included applying hypothetical rate increases to the weighted-average cost of capital used in our income approach analyses given the current COVID-19 environment, and the estimated fair values remained in excess of the carrying values. Based on such evaluation, we do not believe it is more likely than not that the fair values of our reporting units are below their respective carrying values as of June 30, 2020. However, we believe the passage of time will provide new information regarding the expected duration and severity of impacts of COVID-19 on the economy as a whole and to our business. The Company’s forecasting process in a COVID-19 environment is resulting in unprecedented challenges, given we are unable to predict the expected duration and severity of impacts of COVID-19 on the Company’s business. Accordingly, we believe all of our reporting units are at an elevated risk for impairment in future periods. A prolonged decline in the outlook for future revenue and cash flows or other factors, related to COVID-19 or other events, could result in a determination that a non-cash impairment adjustment is required, which could be material. The Company will continue to monitor events and circumstances that may affect the fair value or carrying value of our reporting units. The following table summarizes our goodwill activity by reportable segment for the period presented: Hotels, Media & Platform Experiences & Dining Other (4) Total (in millions) Balance as of December 31, 2019 $ 405 $ 333 $ 102 $ 840 Re-allocation of goodwill (1) 2 — (2 ) — Disposition (2) — — (6 ) (6 ) Other adjustments (3) — 6 (3 ) 3 Balance as of June 30, 2020 $ 407 $ 339 $ 91 $ 837 (1) Re-allocation of goodwill as a result of changes to reporting units related to internal restructuring. (2) Disposition relates to the sale of our SmarterTravel business. (3) Other adjustments primarily relate to an immaterial business acquisition in our Experiences & Dining segment and foreign currency translation on goodwill. (4) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 8: 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”). On May 12, 2017, the 2015 Credit Facility was amended to, among other things, (i) increase the aggregate amount of revolving loan commitments available from $1.0 billion to $1.2 billion; and (ii) extend the maturity date of the 2015 Credit Facility from June 26, 2020 to May 12, 2022 (the “First Amendment”). On May 5, 2020, we amended our 2015 Credit Facility (“Second Amendment”) to, among other things, suspend the leverage ratio covenant on this facility beginning in the second quarter of 2020 and ending prior to September 30, 2021 (or such earlier date as elected by the Company), and replacing it with a minimum liquidity covenant, or the Leverage Covenant Holiday, that requires us to maintain $150 million of unrestricted cash, cash equivalents and short-term investments less deferred merchant payables plus available revolver capacity, which will apply only during the Leverage Covenant Holiday, provide collateral to secure the obligations under the agreement, as well as downsizing its capacity to $1.0 billion from $1.2 billion During March 2020, the Company borrowed $700 million from the 2015 Credit Facility. These funds were drawn down as a precautionary measure to reinforce our liquidity position and preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. For the three and six months ended June 30, 2020, we recorded total interest expense and commitment fees on our 2015 Credit Facility of $5 million and $6 million, respectively, to interest expense on our unaudited condensed consolidated statements of operations. For both the three and six months ended June 30, 2019, we recorded total interest expense and commitment fees on our 2015 Credit Facility of $1 million to interest expense on our unaudited condensed consolidated statements of operations. As of December 31, 2019, the Company had no outstanding borrowings under the 2015 Credit Facility. All unpaid interest and commitment fee amounts as of June 30, 2020 and December 31, 2019 were not material. In connection with the Second Amendment, we incurred additional lender fees and debt financing costs totaling $4 million during the three months ended June 30, 2020, which were capitalized as deferred financing costs and recorded to other long-term assets on the unaudited consolidated balance sheet. These costs will be amortized over the remaining term of the 2015 Credit Facility, using the effective interest rate method, and recorded to interest expense on our unaudited condensed consolidated statements of operations. The resulting write down of previous deferred financing costs incurred from the First Amendment as a result of the Second Amendment was not material. There is no specific repayment date prior to the maturity date for any 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 any 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 Second Amendment also prohibits the Company from repurchasing shares of its common stock and paying dividends, among other restrictions, during the Leverage Covenant Holiday. In connection with the Second Amendment and as collateral to secure the obligations, the Company and certain subsidiaries have pledged, and granted security interests and liens in and on, substantially all of their assets. minimum liquidity covenant and Chinese Credit Facility We were party to a $30 million, one-year Issuance of Senior Notes On July 9, 2020, the Company completed the sale of $500 million aggregate principal amount of 7.000% senior notes due July 15, 2025 (the "Senior Notes") in a private offering. The Senior Notes were issued pursuant to an Indenture, dated July 9, 2020, among the Company, the Guarantors and Wilmington Trust, National Association, as trustee (the “Indenture”). The Indenture provides, among other things, that interest will be payable on the Senior Notes on January 15 and July 15 of each year, beginning on January 15, 2021, until their maturity date of July 15, 2025. The Senior Notes are senior unsecured obligations of the Company and are guaranteed by each of its domestic subsidiaries that guarantees the Company’s 2015 Credit Facility. Subsequently, in July 2020, the Company used all the net proceeds from the Senior Notes, or $490 million, net of approximately $10 million in debt issuances costs, to repay a portion of our 2015 Credit Facility borrowings that existed as of June 30, 2020. Refer to “Note 15: Subsequent Events” for information about the Senior Notes |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9: INCOME TAXES Each interim period is considered an integral part of the annual period and, accordingly, we measure our income tax expense using an estimated annual effective tax rate. An enterprise is required, at the end of each interim reporting period, to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim period. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The CARES Act is an emergency economic stimulus package in response to the COVID-19 pandemic, which among other things contains numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for fiscal years ended before the date of enactment. We anticipate that we will benefit from the temporary five-year We had income tax benefits of $26 million and $38 million for the three and six months ended June 30, 2020, respectively, and income tax expense of $34 million and $41 million for the three and six months ended June 30, 2019, respectively. The decrease in our income tax expense during the three and six months ended June 30, 2020, when compared to the same periods in 2019, was primarily due to pretax losses incurred during both the three and six months ended June 30, 2020, respectively, and a tax benefit of $5 million and $19 million during the three and six months ended June 30, 2020, respectively, from the tax rate differential in tax years applicable to U.S. loss carryforwards that became eligible for carryback under the CARES Act enacted in March 2020, offset by an increase in the recognition of stock-based compensation shortfalls related to the decline in the Company’s stock price during both the three and six months ended June 30, 2020, respectively. Our policy is to recognize accrued interest and penalties related to unrecognized tax benefits and income tax liabilities as part of our income tax expense. As of June 30, 2020, we had an accrued interest liability of $24 million, net of federal and state benefit, and no penalties have been accrued. By virtue of consolidated income tax returns previously filed with Expedia, we are currently under an IRS audit for the 2009, 2010 and short-period 2011 tax years. We are separately under examination by the IRS for the short-period 2011 and 2012 through 2016 tax years, under an employment tax audit by the IRS for the 2015 through 2017 tax years, and have various ongoing audits for state income tax returns. 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 June 30, 2020, no material assessments have resulted, except as noted below regarding our 2009, 2010, and 2011 IRS audit with Expedia and our 2012 and 2013 standalone IRS audit. In January 2017 and April 2019, as part of the IRS audit of Expedia, we received Notices of Proposed Adjustment from the IRS for the 2009, 2010, and 2011 tax years. Subsequently, in September 2019, as part of Tripadvisor’s standalone audit, we received Notices of Proposed Adjustment from the IRS for the 2012 and 2013 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 $50 million to $60 million at the close of the audit if the IRS prevails. The estimated range takes into consideration competent authority relief and transition tax regulations , and is exclusive of interest, which would be significant . 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 through 2013 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. We have requested competent authority assistance under the Mutual Agreement Procedure (“MAP”) for tax years 2009 through 2013. We expect the competent authorities to present a resolution for the 2009 through 2011 tax years in the near future. Upon receipt, we will assess the resolution provided by the competent authorities as well as its impact on our existing income tax reserves for all open subsequent years . In July 2015, the United States Tax Court (the “Court”) issued an opinion favorable to 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. On June 7, 2019, a three-judge panel from the Ninth Circuit Court of Appeals reversed the Court’s decision and upheld the validity of the Treasury regulation (Reg. sec. 1.482-7A(d)(2)) requiring stock-based compensation costs to be included in the costs shared in a cost-sharing arrangement. Based on this Ninth Circuit Court of Appeals decision, we recorded a cumulative income tax expense of $15 million during the year ended December 31, 2019, which was a reversal of income tax benefits taken by the Company since the Court’s 2015 opinion. In November 2019, the Ninth Circuit denied Altera’s request for a rehearing en banc. On February 10, 2020, Altera filed a certiorari petition with the Supreme Court, asking it to hear an appeal of the Ninth Circuit’s decision. On June 22, 2020, the Supreme Court denied Altera’s request to review the Ninth Circuit decision. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following for the periods presented: June 30, 2020 December 31, 2019 (in millions) Accrued salary, bonus, and related benefits $ 35 $ 74 Accrued marketing costs 12 27 Current income tax payables 3 14 Finance lease liability - current portion 5 5 Operating leases liability - current portion 20 20 Restructuring and other related reorganization costs (1) 7 1 Other 59 62 Total $ 141 $ 203 (1) The Company incurred pre-tax restructuring and other related reorganization costs of $33 million and $42 million during the three and six months ended June 30, 2020, respectively. The costs consist of employee severance and related benefits. In response to the COVID-19 pandemic, during the second quarter of 2020, the Company committed to restructuring actions intended to reinforce its financial position, reduce its cost structure, and improve operational efficiencies, which have resulted in headcount reductions. In addition, we engaged in a smaller scale restructuring action in the first quarter of 2020 to reduce our cost structure and improve our operational efficiencies, which resulted in headcount reductions for which we recognized $9 million in restructuring and other related reorganization costs. The following table summarizes our restructuring and other related reorganization costs for the six months ended June 30, 2020: Restructuring and other related reorganization costs (in millions) Accrued liability as of December 31, 2019 $ 1 Charges 42 Payments (36 ) Accrued liability as of June 30, 2020 $ 7 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11: COMMITMENTS AND CONTINGENCIES As of June 30, 2020, there have been no material changes to our commitments and contingencies since December 31, 2019. Refer to “Note 14: Commitments and Contingencies Legal Proceedings In the ordinary course of business, we are party to regulatory and legal matters, including threats thereof, arising out of our operations. These matters may involve claims involving intellectual property rights (including alleged infringement of third-party intellectual property rights), tax matters (including value-added, excise, transient occupancy and accommodation taxes), regulatory compliance (including competition and consumer protection matters), defamation and free speech, personal injury claims, labor and employment matters and commercial disputes. Income and Non-Income Taxes We are under audit by the IRS and various other domestic and foreign tax authorities with regards to income tax and non-income tax matters. We have reserved for potential adjustments 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 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. Refer to “Note 9: Income Taxes |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 12: STOCKHOLDERS’ EQUITY On January 31, 2018, our Board of Directors authorized an additional repurchase of up to $250 million of our shares of common stock under a share repurchase program. This share repurchase program has no expiration date but may be suspended or terminated by our Board of Directors at any time. The Company did not repurchase any shares of outstanding common stock during the three and six months ended June 30, 2019 under the share repurchase program. As of December 31, 2019, we had $190 million remaining available to repurchase shares of our common stock under this share repurchase program. The Company did not repurchase any shares of outstanding common stock during the three months ended June 30, 2020 under the share repurchase program. During the six months ended June 30, 2020, we repurchased 4,707,450 shares of our outstanding common stock at an average share price of $24.32 per share, exclusive of fees and commissions, or $115 million in the aggregate. As of June 30, 2020, we had $75 million remaining available to repurchase shares of our common stock under this share repurchase program, and there were 18,844,614 shares of the Company’s common stock held in treasury with an aggregate cost of $722 million. While the Board of Directors has not suspended or terminated the share repurchase program, the terms of our Second Amendment currently prohibit the Company from engaging in share repurchases and the terms of our Indenture impose certain limitations and restrictions on share repurchases. Refer to “Note 8: Debt “Note 15: Subsequent Events” for further information about our Indenture |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 13: SEGMENT INFORMATION We have two reportable segments: (1) Hotels, Media & Platform; and (2) Experiences & Dining. Our Hotels, Media & Platform reportable segment includes the following revenue sources: (1) Tripadvisor-branded hotels revenue – primarily consisting of hotel auction revenue, and to a lesser extent , subscription-based advertising, hotel sponsored placements revenue, and CPA revenue; and (2) Tripadvisor-branded display and platform revenue – consisting of display-based advertising revenue. Our Experiences & Dining reportable segment includes an aggregation of our Experiences and Dining operating segments. All remaining business units have been combined into and reported as “Other”, which includes Rentals, Flights & Car, Cruises, and Tripadvisor China, as none of these businesses meet the quantitative thresholds and other criteria to qualify as reportable segments, and therefore are combined and disclosed as Other. The nature of the services provided and revenue recognition policies are summarized by reported segment in “Note 3: Revenue Recognition .” Our operating segments are determined based on how our chief operating decision maker manages our business, regularly accesses information and evaluates performance for operating decision-making purposes, including allocation of resources . All direct general and administrative costs are included in the applicable segments and business units; however, all corporate general and administrative costs are included in the Hotels, Media & Platform reportable segment. In addition, the Hotels, Media & Platform reportable segment includes all Tripadvisor-related brand advertising expenses (primarily television advertising), technical infrastructure, and other costs supporting the Tripadvisor platform. 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. We define Adjusted EBITDA as net income (loss) plus: (1) (provision) benefit for income taxes; (2) other income (expense), net; (3) depreciation and amortization; (4) stock-based compensation and other stock-settled obligations; (5) goodwill, long-lived asset and intangible asset impairments; (6) legal reserves and settlements; (7) restructuring and other related reorganization costs; and (8) non-recurring expenses and income. The following tables present our segment information for the three and six months ended June 30, 2020 and 2019 and includes a reconciliation of Adjusted EBITDA to Net Income. We record depreciation of property and equipment and amortization of intangible assets, stock-based compensation and other stock-settled obligations, legal reserves and settlements, restructuring and other related reorganization costs, 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 CODM does not use this information to evaluate operating segments. Accordingly, we do not regularly provide such information by segment to our CODM. Intersegment revenue is not material and is included in Other. Three months ended June 30, 2020 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 38 $ 14 $ 7 $ — $ 59 Adjusted EBITDA (33 ) (38 ) (3 ) — (74 ) Depreciation and amortization (32 ) (32 ) Stock-based compensation (25 ) (25 ) Restructuring and other related reorganization costs (33 ) (33 ) Operating income (loss) (164 ) Other income (expense), net (15 ) Income (loss) before income taxes (179 ) (Provision) benefit for income taxes 26 Net income (loss) (153 ) Three months ended June 30, 2019 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 254 $ 125 $ 43 $ — $ 422 Adjusted EBITDA 108 7 13 — 128 Depreciation and amortization (30 ) (30 ) Stock-based compensation (32 ) (32 ) Operating income (loss) 66 Other income (expense), net 2 Income (loss) before income taxes 68 (Provision) benefit for income taxes (34 ) Net income (loss) 34 Six months ended June 30, 2020 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 207 $ 97 $ 33 $ — $ 337 Adjusted EBITDA 20 (57 ) 3 — (34 ) Depreciation and amortization (64 ) (64 ) Stock-based compensation (51 ) (51 ) Restructuring and other related reorganization costs (42 ) (42 ) Operating income (loss) (191 ) Other income (expense), net (16 ) Income (loss) before income taxes (207 ) (Provision) benefit for income taxes 38 Net income (loss) (169 ) Six months ended June 30, 2019 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 508 $ 206 $ 84 $ - $ 798 Adjusted EBITDA 212 (17 ) 22 - 217 Depreciation and amortization (61 ) (61 ) Stock-based compensation (60 ) (60 ) Operating income (loss) 96 Other income (expense), net 5 Income (loss) before income taxes 101 (Provision) benefit for income taxes (41 ) Net income (loss) 60 (1) Includes allocated corporate general and administrative costs of $16 million and $34 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $1 million and $5 million for the three and six months ended June 30, 2020, respectively. (2) Includes allocated corporate general and administrative costs of $17 million and $31 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. (3) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment. Customer Concentrations Refer to “Note 6: Financial Instruments and Fair Value Measurements |
Other Income (Expense), Net
Other Income (Expense), Net | 6 Months Ended |
Jun. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | NOTE 14: OTHER INCOME (EXPENSE), NET Other income (expense), net, consists of the following for the periods presented: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (in millions) (in millions) Foreign currency exchange rates gains (losses), net (1) $ 1 $ (1 ) $ 2 $ (1 ) Earnings (losses) from equity method investment, net (1 ) — (1 ) — Loss on sale of business (2) (5 ) — (5 ) — Other, net (4 ) — (5 ) — Total $ (9 ) $ (1 ) $ (9 ) $ (1 ) (1) Our foreign currency exchange gains (losses), net, are generally related to foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, partially offset by the foreign currency forward contract gains and losses. (2) Related to loss on disposal on the sale of our SmarterTravel business during the three months ended June 30, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 15: SUBSEQUENT EVENTS On July 9, 2020, the Company completed the sale of $500 million aggregate principal amount of 7.000% senior notes due 2025 (the “Senior Notes”), pursuant to a purchase agreement, dated July 7, 2020, among the Company, the guarantors party thereto (the “Guarantors”) and the initial purchasers party thereto. The Senior Notes were issued pursuant to an indenture, dated July 9, 2020 (the “Indenture”), among the Company, the Guarantors and Wilmington Trust, National Association, as trustee. The Indenture provides, among other things, that interest will be payable on the Senior Notes on January 15 and July 15 of each year, beginning on January 15, 2021, until their maturity date of July 15, 2025. The Senior Notes are senior unsecured obligations of the Company and will be guaranteed on a senior unsecured basis by each of its existing and future wholly owned domestic restricted subsidiaries that guarantees the credit facility or that guarantees certain of our other indebtedness or indebtedness of a guarantor. The Company has the option to redeem all or a portion of the Senior Notes at any time on or after July 15, 2022 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any. The Company may also redeem all or any portion of the Senior Notes at any time prior to July 15, 2022, at a price equal to 100% of the aggregate principal amount thereof plus a make-whole premium and accrued and unpaid interest, if any. In addition, before July 15, 2022, the Company may redeem up to 40% The Indenture contains covenants that, among other things, restrict the ability of the Company and the ability of certain of its subsidiaries to incur or guarantee additional indebtedness or issue disqualified stock or certain preferred stock; pay dividends and make other distributions or repurchase stock; make certain investments; create or incur liens; sell assets; create restrictions affecting the ability of restricted subsidiaries that are non-guarantors to make distributions, loans or advances or transfer assets to the Company or the guarantors; enter into certain transactions with the Company’s affiliates; designate restricted subsidiaries as unrestricted subsidiaries; and merge, consolidate or transfer or sell all or substantially all of the Company’s assets. These covenants are subject to a number of important exceptions and qualifications. The Indenture provides for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest; breach of other agreements in the indentures; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and certain of its subsidiaries; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. In the third quarter of 2020, the Company used all the net proceeds from the Senior Notes, or $490 million, net of approximately $10 million in debt issuances costs, to repay a portion of our 2015 Credit Facility borrowings that existed as of June 30, 2020. Refer to “Note 8: Debt” |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements present our results of operations, financial position and cash flows on a consolidated basis. The unaudited condensed consolidated financial statements include Tripadvisor, our wholly-owned subsidiaries, and entities we control, or in which we have a variable interest and are the primary beneficiary of expected cash profits or losses. All inter-company accounts and transactions have been eliminated in consolidation. One of our subsidiaries that operates in China has 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’ financial results were not material for all periods presented. Investments in entities in which we do not have a controlling financial interest are accounted for under the equity method, the fair value option, as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. As of June 30, 2020, Liberty TripAdvisor Holdings, Inc. (“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 14.9% 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 23.0% of the outstanding common stock. Because each share of Class B common stock 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 % of our voting power. We had no related party transactions with LTRIP during the three and six months ended June 30, 2020 and 2019, respectively. |
Accounting Estimates | Accounting Estimates We use estimates and assumptions in the preparation of our unaudited condensed consolidated financial statements in accordance with GAAP. Our estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our unaudited condensed consolidated financial statements. These estimates and assumptions also affect the reported amount of net income or loss during any period. Our actual financial results could differ significantly from these estimates. The significant estimates underlying our unaudited condensed consolidated financial statements include: (i) recognition and recoverability of goodwill, definite-lived intangibles and other long-lived assets; and (ii) accounting for income taxes. The COVID-19 pandemic has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact our results of operations. As a result, some of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. |
Risks and Uncertainties | Risks and Uncertainties In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China, and on March 11, 2020 was declared a global pandemic. We are subject to risks and uncertainties as a result of the COVID-19 pandemic. COVID-19 has caused material declines in demand within the travel, hospitality, restaurant, and leisure industry. The pandemic’s proliferation, concurrent with travel bans, increased governmental restrictions and mandates globally, to limit the spread of the virus, has dampened consumer demand for our products and services, which has adversely and materially affected our business, results of operations and financial condition. We believe the travel industry and our business will continue to be adversely and materially affected while travel bans and other government restrictions and mandates continue to remain in place. However, the extent of the impact of the COVID-19 pandemic on our business remains highly uncertain and difficult to predict, as the response to the pandemic continues to be ongoing and shifting as information is rapidly evolving, and the duration and severity of the pandemic are also uncertain and cannot be predicted. In addition, we do not have visibility into when these bans will be lifted, where additional bans may be initiated, or where bans that have been previously lifted are reinstated due to resurgence of virus, nor do we have visibility into the changes to consumer usage patterns on our platform or travel behavior patterns when travel bans and other government restrictions and mandates are fully lifted. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a protracted local and/or global economic recession. Such economic disruption could have a material adverse effect on our business as consumers reduce their discretionary spending. Policymakers around the globe have responded with fiscal policy actions to support certain areas of the travel industry and economy as a whole. The magnitude and overall effectiveness of these actions remains uncertain. The Company's future results of operations and liquidity could also be adversely impacted by delays in payments of outstanding accounts receivable amounts beyond normal payment terms, travel supplier and restaurant insolvencies, and the impact of any initiatives or programs that the Company may undertake to address financial and operational challenges faced by the Company and its customers. As of the date of issuance of these unaudited condensed consolidated financial statements, the extent and duration to which the COVID-19 pandemic may materially impact the Company's financial condition, liquidity, or results of operations in the future continues to be uncertain. |
Seasonality | Seasonality Consumers’ travel expenditures have historically followed a seasonal pattern. Correspondingly, travel partners’ advertising investments, and therefore our revenue and profits, have also historically followed a seasonal pattern. Our financial performance tends to be seasonally highest in the second and third quarters of a given year, which includes the seasonal peak in consumer demand, traveler hotel and rental stays, and travel activities and experiences taken, compared to the first and fourth quarters, which represent seasonal low points. Significant shifts in our business mix or adverse economic conditions could result in future seasonal patterns that are different from historical trends. In addition, due to the impact of COVID-19 to our business, we did not experience our typical seasonal pattern for revenue and profit during the three months ended June 30, 2020. In addition, cash outflows to travel suppliers related to deferred merchant payables significantly exceeded cash received from travelers during the first six months of 2020, reflecting the decline in consumer demand for our products and cancellations of reservations related to COVID-19, contributing significantly to unfavorable working capital trends and material negative operating cash flow during the six months ended June 30, 2020. It is difficult to forecast the seasonality for the upcoming quarters, given the uncertainty related to the extent and duration of the impact from COVID-19 and the s hape and timing of a recovery. |
Significant Accounting Policies | Significant Accounting Policies With the exception of the change for the accounting of credit losses as a result of adopting ASC 326 – Financial Instruments – Credit Losses Significant Accounting Policies |
Recently Adopted Accounting Pronouncements | Recently Adopted Credit Losses In June 2016, the FASB issued new accounting guidance which replaces the incurred loss impairment model with an expected loss methodology on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, notes 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. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell. The Company adopted ASC 326 on January 1, 2020, using a modified retrospective transition method for all financial assets measured at amortized cost, which requires a cumulative-effect adjustment of initial application, if any, to be recognized on the date of adoption. The cumulative-effect adjustment recorded by the Company on January 1, 2020 to retained earnings on its unaudited condensed consolidated balance sheet was $3 million. Financial results for reporting periods beginning after January 1, 2020 are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous GAAP. During the three and six months ended June 30, 2020, the impact of adopting the expected credit loss model was not material to the Company. Credit loss estimates on accounts receivable are recorded in general and administrative expenses on our unaudited condensed consolidated statement of operations. Credit loss estimates on available-for-sale debt securities are recorded in interest expense on our unaudited condensed consolidated statement of operations. The Company has updated its significant accounting policies as described below as of January 1, 2020. Accounts Receivable and Allowance for Credit Losses. The Company historically recorded an allowance for doubtful accounts using the incurred loss model. Upon adoption of ASC 326, the Company transitioned to the “expected credit loss” methodology in estimating its allowance for credit losses. We apply the “expected credit loss” methodology by first assessing our historical losses based on credit sales and then adding in an assessment of expected changes in the foreseeable future, whether positive or negative, to the Company’s ability to collect its outstanding accounts receivables, or the expectation for future losses. The Company develops its expectation for future losses by assessing the profiles of its customers using their historical payment patterns, any known changes to those customers’ ability to fulfill their payment obligations, and assessing broader economic conditions that may impact our customers’ ability to pay their obligations. Where appropriate, the Company performs this analysis using a portfolio approach. Portfolios comprise customers with similar characteristics and payment history, and we have concluded that the aggregation of these customers into various portfolios does not produce a result that is materially different from considering the affected customers individually. Customers are assigned internal credit ratings, as determined by the Company, based on our collection profiles. Customers whose outstanding obligations are less likely to experience a credit loss are assigned a higher internal credit rating, and those customers whose outstanding obligations are more likely to experience a credit loss are assigned a lower credit rating. We recognize a greater credit loss allowance on the accounts receivable due from those customers in the lower credit tranche, as determined by the Company. When the Company becomes aware of facts and circumstances affecting an individual customer, it also takes that specific customer information into account as part of its calculation of expected credit losses . The Company's exposure to credit losses may increase if our customers are adversely affected by changes in macroeconomic pressures or uncertainty associated with local or global economic recessions, including the economic impact to our customers associated with COVID-19, or other customer-specific factors. Available-for-sale debt securities. The Company's investment portfolio at any point in time may contain investments in U.S. treasury and U.S. government agency securities, taxable and tax-exempt municipal notes, corporate notes and bonds, commercial paper, non-U.S. government agency securities, cash and term deposits, and money market funds. The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero loss expectation for U.S. treasury and U.S. government agency securities. The Company regularly reviews the securities in an unrealized loss position and evaluates the expected credit loss risk by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of June 30, 2020, the Company had no available-for-sale-debt securities . |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Reconciliation of Disaggregated Revenue to Segment Revenue | A reconciliation of disaggregated revenue to segment revenue is also included below. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Major products/revenue sources (1): (in millions) Hotels, Media & Platform Tripadvisor-branded hotels $ 31 $ 211 $ 168 $ 427 Tripadvisor-branded display and platform 7 43 39 81 Total Hotels, Media & Platform 38 254 207 508 Experiences & Dining 14 125 97 206 Other (2) 7 43 33 84 Total Revenue $ 59 $ 422 $ 337 $ 798 (1) Our revenue is recognized primarily at a point in time for all reported segments. (2) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment |
Summary of Balances of Accounts Receivable and Contract Assets from Contracts with Customers | The following table provides information about the opening and closing balances of accounts receivable and contract assets from contracts with customers (in millions): June 30, 2020 December 31, 2019 Accounts receivable 69 176 Contract assets 5 7 Total $ 74 $ 183 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding | Below is a reconciliation of the weighted average number of shares of common stock outstanding in calculating Diluted EPS (shares in thousands and dollars in millions, except per share amounts) for the periods presented: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Numerator: Net income (loss) $ (153 ) $ 34 $ (169 ) $ 60 Denominator: Weighted average shares used to compute Basic EPS 134,213 139,070 135,227 138,744 Weighted average effect of dilutive securities: Stock options — 187 — 296 RSUs/MSUs — 1,548 — 1,997 Weighted average shares used to compute Diluted EPS 134,213 140,805 135,227 141,037 Basic EPS $ (1.14 ) $ 0.24 $ (1.25 ) $ 0.43 Diluted EPS $ (1.14 ) $ 0.24 $ (1.25 ) $ 0.43 |
Stock Based Awards and Other _2
Stock Based Awards and Other Equity Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Amount of Stock-Based Compensation Expense Related to Stock-Based Awards | The following table presents the amount of stock-based compensation expense related to stock-based awards on our unaudited condensed consolidated statements of operations during the periods presented: Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019 (in millions) (in millions) Cost of revenue $ — $ — $ 1 $ — Selling and marketing 4 6 7 11 Technology and content 9 14 20 27 General and administrative 12 12 23 22 Total stock-based compensation expense 25 32 51 60 Income tax benefit from stock-based compensation (5 ) (8 ) (12 ) (14 ) Total stock-based compensation expense, net of tax $ 20 $ 24 $ 39 $ 46 |
Summary of Stock Option Activity | A summary of our stock option activity, consisting primarily of service-based non-qualified stock options, during the six months ended June 30, 2020, 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, 2019 6,017 $ 50.27 Granted 1,095 25.38 Exercised (2 ) 17.08 Cancelled or expired (732 ) 46.74 Options outstanding at June 30, 2020 6,378 $ 46.42 5.8 $ — Exercisable as of June 30, 2020 3,630 $ 55.30 3.9 $ — Vested and expected to vest after June 30, 2020 (1) 6,378 $ 46.42 5.8 $ — ( 1 ) 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 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: Six months ended June 30, 2020 2019 Risk free interest rate 1.18 % 2.42 % Expected term (in years) 5.30 5.19 Expected volatility 43.13 % 42.17 % Expected dividend yield — % — % Weighted-average grant date fair value $ 10.11 $ 21.80 |
Summary of RSU Activity | A summary of our RSU activity during the six months ended June 30, 2020 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, 2019 8,469 $ 45.42 Granted 4,834 25.20 Vested and released (1) (2,397 ) 47.67 Cancelled (2,858 ) 38.00 Unvested RSUs outstanding as of June 30, 2020 8,048 $ 34.96 $ 153 (1) Inclusive of 628,545 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the Tripadvisor, Inc. 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. |
Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining | A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2020 related to our non-vested equity awards is presented below (in millions, except in years information): Stock Options RSUs/MSUs Unrecognized compensation expense $ 29 $ 212 Weighted average period remaining (in years) 2.7 2.1 |
MSUs | |
Summary of RSU Activity | A summary of our MSU activity during the six months ended June 30, 2020 is presented below: Weighted Average Grant- Aggregate MSUs Date Fair Intrinsic Outstanding Value Per Share Value (in thousands) (in millions) Unvested MSUs outstanding as of December 31, 2019 389 $ 40.99 Granted (1) 133 28.15 Vested and released ― ― Cancelled (24 ) 58.63 Unvested MSUs outstanding as of June 30, 2020 498 $ 36.71 $ 9 (1) MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of the Nasdaq Composite Total Return Index. Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200% of the target number of MSUs originally granted, or to be issued none at all. These MSUs were granted under the 2018 Plan. |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments All Other Investments [Abstract] | |
Schedule of Cash Equivalents and Marketable Securities | The following table shows our cash equivalents and marketable securities that are measured at fair value on a recurring basis and were categorized using the fair value hierarchy, as well as their classification on Amortized Cost Fair Value (1) Cash and Cash Equivalents Level 2: Term deposits $ 115 $ 115 $ 115 Total $ 115 $ 115 $ 115 (1) Unrealized gains or losses related to our cash equivalents were not material. |
Notional Principal Amounts of Outstanding Derivative Instruments | The following table shows the notional principal amounts of our outstanding derivative instruments as of the periods presented: June 30, 2020 December 31, 2019 (in millions) Foreign currency exchange - forward contracts (1) (2) $ — $ 10 (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 June 30, 2020 and one outstanding derivative contract as of December 31, 2019. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. (2) The fair value of our outstanding derivative as of December 31, 2019 was not material. |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity by Reportable Segments | The following table summarizes our goodwill activity by reportable segment for the period presented: Hotels, Media & Platform Experiences & Dining Other (4) Total (in millions) Balance as of December 31, 2019 $ 405 $ 333 $ 102 $ 840 Re-allocation of goodwill (1) 2 — (2 ) — Disposition (2) — — (6 ) (6 ) Other adjustments (3) — 6 (3 ) 3 Balance as of June 30, 2020 $ 407 $ 339 $ 91 $ 837 (1) Re-allocation of goodwill as a result of changes to reporting units related to internal restructuring. (2) Disposition relates to the sale of our SmarterTravel business. (3) Other adjustments primarily relate to an immaterial business acquisition in our Experiences & Dining segment and foreign currency translation on goodwill. (4) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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: June 30, 2020 December 31, 2019 (in millions) Accrued salary, bonus, and related benefits $ 35 $ 74 Accrued marketing costs 12 27 Current income tax payables 3 14 Finance lease liability - current portion 5 5 Operating leases liability - current portion 20 20 Restructuring and other related reorganization costs (1) 7 1 Other 59 62 Total $ 141 $ 203 (1) The Company incurred pre-tax restructuring and other related reorganization costs of $33 million and $42 million during the three and six months ended June 30, 2020, respectively. The costs consist of employee severance and related benefits. In response to the COVID-19 pandemic, during the second quarter of 2020, the Company committed to restructuring actions intended to reinforce its financial position, reduce its cost structure, and improve operational efficiencies, which have resulted in headcount reductions. In addition, we engaged in a smaller scale restructuring action in the first quarter of 2020 to reduce our cost structure and improve our operational efficiencies, which resulted in headcount reductions for which we recognized $9 million in restructuring and other related reorganization costs. The following table summarizes our restructuring and other related reorganization costs for the six months ended June 30, 2020: Restructuring and other related reorganization costs (in millions) Accrued liability as of December 31, 2019 $ 1 Charges 42 Payments (36 ) Accrued liability as of June 30, 2020 $ 7 |
Summary of Restructuring and Other Related Reorganization Costs | The following table summarizes our restructuring and other related reorganization costs for the six months ended June 30, 2020: Restructuring and other related reorganization costs (in millions) Accrued liability as of December 31, 2019 $ 1 Charges 42 Payments (36 ) Accrued liability as of June 30, 2020 $ 7 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | Three months ended June 30, 2020 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 38 $ 14 $ 7 $ — $ 59 Adjusted EBITDA (33 ) (38 ) (3 ) — (74 ) Depreciation and amortization (32 ) (32 ) Stock-based compensation (25 ) (25 ) Restructuring and other related reorganization costs (33 ) (33 ) Operating income (loss) (164 ) Other income (expense), net (15 ) Income (loss) before income taxes (179 ) (Provision) benefit for income taxes 26 Net income (loss) (153 ) Three months ended June 30, 2019 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 254 $ 125 $ 43 $ — $ 422 Adjusted EBITDA 108 7 13 — 128 Depreciation and amortization (30 ) (30 ) Stock-based compensation (32 ) (32 ) Operating income (loss) 66 Other income (expense), net 2 Income (loss) before income taxes 68 (Provision) benefit for income taxes (34 ) Net income (loss) 34 Six months ended June 30, 2020 Hotels, Media & Platform (1) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 207 $ 97 $ 33 $ — $ 337 Adjusted EBITDA 20 (57 ) 3 — (34 ) Depreciation and amortization (64 ) (64 ) Stock-based compensation (51 ) (51 ) Restructuring and other related reorganization costs (42 ) (42 ) Operating income (loss) (191 ) Other income (expense), net (16 ) Income (loss) before income taxes (207 ) (Provision) benefit for income taxes 38 Net income (loss) (169 ) Six months ended June 30, 2019 Hotels, Media & Platform (2) Experiences & Dining Other (3) Corporate and Unallocated Total (in millions) Revenue $ 508 $ 206 $ 84 $ - $ 798 Adjusted EBITDA 212 (17 ) 22 - 217 Depreciation and amortization (61 ) (61 ) Stock-based compensation (60 ) (60 ) Operating income (loss) 96 Other income (expense), net 5 Income (loss) before income taxes 101 (Provision) benefit for income taxes (41 ) Net income (loss) 60 (1) Includes allocated corporate general and administrative costs of $16 million and $34 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $1 million and $5 million for the three and six months ended June 30, 2020, respectively. (2) Includes allocated corporate general and administrative costs of $17 million and $31 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. (3) Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment. |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income And Expenses [Abstract] | |
Summary of Other Income (Expense), Net | Other income (expense), net, consists of the following for the periods presented: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (in millions) (in millions) Foreign currency exchange rates gains (losses), net (1) $ 1 $ (1 ) $ 2 $ (1 ) Earnings (losses) from equity method investment, net (1 ) — (1 ) — Loss on sale of business (2) (5 ) — (5 ) — Other, net (4 ) — (5 ) — Total $ (9 ) $ (1 ) $ (9 ) $ (1 ) (1) Our foreign currency exchange gains (losses), net, are generally related to foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, partially offset by the foreign currency forward contract gains and losses. (2) Related to loss on disposal on the sale of our SmarterTravel business during the three months ended June 30, 2020. |
Business Description and Basi_2
Business Description and Basis of Presentation - Additional Information (Details) shares in Millions, Restaurant in Millions, Hotel in Millions | 3 Months Ended | 6 Months Ended |
Sep. 30, 2019Visitor | Jun. 30, 2020USD ($)MarketLanguageHotelVacationRentalRestaurantActivityandAttractionAirlineCruiseVote / sharesshares | |
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 | |
Description of user-generated reviews and opinions across broad base of global travel-related businesses | Tripadvisor features 867 million reviews and opinions on 8.7 million places to stay, places to eat and things to do – including 1.5 million hotels, inns, B&Bs and specialty lodging, 786,000 rental properties, 4.6 million restaurants, 1.3 million travel activities and experiences worldwide, 500,000 airlines, and 30,000 cruises. | |
Number of hotels and accommodations | Hotel | 1.5 | |
Number of vacation rentals | VacationRental | 786,000 | |
Number of restaurants | Restaurant | 4.6 | |
Number of activities and attractions worldwide | ActivityandAttraction | 1,300,000 | |
Number of airlines | Airline | 500,000 | |
Number of cruises | Cruise | 30,000 | |
Number of average monthly unique visitors | Visitor | 463 | |
Liberty TripAdvisor Holdings, Inc. | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Beneficially ownership of shares of common stock | shares | 18.2 | |
Percentage taken from outstanding shares of common stock | 14.90% | |
Percentage of beneficially ownership of shares of common stock class B | 23.00% | |
Right to voting | one vote per share | |
Vote per common stock share | Vote / shares | 1 | |
Beneficially ownership of equity securities | 58.60% | |
Related party transactions | $ | $ 0 | |
Liberty TripAdvisor Holdings, Inc. | Class B Common Stock | ||
Description Of Business And Basis Of Presentation [Line Items] | ||
Beneficially ownership of shares of common stock | shares | 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 Polici_3
Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Accounting Policies [Line Items] | ||||
Retained earnings | $ 509 | $ 681 | ||
Available-for-sale-debt securities | 0 | |||
U.S. Treasury Securities | ||||
Schedule Of Accounting Policies [Line Items] | ||||
Portfolio based securities loss expectation | 0 | |||
U.S. Government Agency Securities | ||||
Schedule Of Accounting Policies [Line Items] | ||||
Portfolio based securities loss expectation | $ 0 | |||
Cumulative Effect, Period of Adoption, Adjustment | Revision of Prior Period, Adjustment | ||||
Schedule Of Accounting Policies [Line Items] | ||||
Retained earnings | $ (3) | $ (3) | $ 3 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Segment | Jun. 30, 2019USD ($) | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
Disaggregation Of Revenue [Line Items] | |||||||
Number of reportable segment | Segment | 2 | ||||||
Deferred revenue | $ 38 | $ 38 | $ 62 | $ 62 | $ 63 | ||
Revenue recognized | 12 | $ 12 | 44 | $ 46 | |||
Contract with customer revenue refunded due to cancellations | 4 | $ 1 | 10 | $ 2 | |||
COVID-19 Pandemic | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Incremental allowance for expected uncollectible amounts of accounts receivable and contract assets | $ 7 | $ 10 | |||||
ASC 606 | |||||||
Disaggregation Of Revenue [Line Items] | |||||||
Customer invoices due period | 30 days |
Revenue Recognition - Reconcili
Revenue Recognition - Reconciliation of Disaggregated Revenue to Segment Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | $ 59 | $ 422 | $ 337 | $ 798 |
Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 38 | 254 | 207 | 508 |
Experiences & Dining Segment | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 14 | 125 | 97 | 206 |
Other | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1],[2] | 7 | 43 | 33 | 84 |
Tripadvisor-Branded Hotels | Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | 31 | 211 | 168 | 427 |
Tripadvisor-Branded Display and Platform | Hotels, Media & Platform | |||||
Disaggregation Of Revenue [Line Items] | |||||
Total Revenue | [1] | $ 7 | $ 43 | $ 39 | $ 81 |
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||||
[2] | Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Balances of Accounts Receivable and Contract Assets from Contracts with Customers (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue From Contract With Customer [Abstract] | ||
Accounts receivable | $ 69 | $ 176 |
Contract assets | 5 | 7 |
Total | $ 74 | $ 183 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Weighted Average Number of Shares of Common Stock Outstanding In Calculating EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||
Net income (loss) | $ (153) | $ 34 | $ (169) | $ 60 |
Denominator: | ||||
Weighted average shares used to compute Basic EPS | 134,213 | 139,070 | 135,227 | 138,744 |
Weighted average effect of dilutive securities: | ||||
Stock options | 187 | 296 | ||
RSUs/MSUs | 1,548 | 1,997 | ||
Weighted average shares used to compute Diluted EPS | 134,213 | 140,805 | 135,227 | 141,037 |
Basic EPS | $ (1.14) | $ 0.24 | $ (1.25) | $ 0.43 |
Diluted EPS | $ (1.14) | $ 0.24 | $ (1.25) | $ 0.43 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - Stock Options, RSUs and MSUs - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 14.2 | 6.1 | 15.6 | 4.8 |
Certain Performance-Based Awards | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 0.7 | 0.5 | 0.7 | 0.5 |
Stock Based Awards and Other _3
Stock Based Awards and Other Equity Instruments - Amount of Stock-Based Compensation Expense Related to Stock-Based Awards (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 25 | $ 32 | $ 51 | $ 60 |
Income tax benefit from stock-based compensation | (5) | (8) | (12) | (14) |
Total stock-based compensation expense, net of tax | 20 | 24 | 39 | 46 |
Cost of Revenue | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 1 | |||
Selling and Marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 4 | 6 | 7 | 11 |
Technology and Content | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 9 | 14 | 20 | 27 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 12 | $ 12 | $ 23 | $ 22 |
Stock Based Awards and Other _4
Stock Based Awards and Other Equity Instruments - Additional Information (Details) | May 27, 2020 | May 08, 2020USD ($)TradingDay | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / shares | Jun. 30, 2019USD ($) |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Capitalized stock based compensation as internal-use software and website development costs | $ 4,000,000 | $ 5,000,000 | $ 8,000,000 | $ 9,000,000 | ||
Number of Average Trading Days | TradingDay | 10 | |||||
Total stock-based compensation expense | 25,000,000 | 32,000,000 | 51,000,000 | 60,000,000 | ||
Income tax benefits from exercise or settlement of stock-based awards | $ 1,000,000 | $ 3,000,000 | $ 13,000,000 | 22,000,000 | ||
Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Target payment | $ 7,000,000 | |||||
Stock Options | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Closing stock price | $ / shares | $ 19.01 | $ 19.01 | ||||
Total intrinsic value | $ 2,000,000 | 2,000,000 | ||||
Total fair value of stock options vested | $ 11,000,000 | $ 10,000,000 | ||||
Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | $ 10,000,000 | |||||
Stock award modification term | On May 27, 2020, the Compensation Committee of the Board of Directors, approved a modification to the Company’s annual RSU grant issued to its employees in the first quarter of 2020, which consisted of reducing the original grant-date vesting period from four years to two years. | |||||
Restricted Stock Units | Maximum | Employees | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Term of stock options, grant-date vesting period | 4 years | |||||
Restricted Stock Units | Minimum [Member] | Employees | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Term of stock options, grant-date vesting period | 2 years | |||||
MSUs | Employees | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Requisite service period for estimated grant-date fair value of stock awards | Dec. 31, 2022 |
Stock Based Awards and Other _5
Stock Based Awards and Other Equity Instruments - Summary of Stock Option Activity (Details) - Stock Options - $ / shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | ||
Options Outstanding | ||
Options Outstanding, Beginning balance | 6,017 | |
Options Outstanding, Granted | 1,095 | |
Options Outstanding, Exercised | (2) | |
Options Outstanding, Cancelled or expired | (732) | |
Options Outstanding, Ending balance | 6,378 | |
Options Outstanding, Exercisable | 3,630 | |
Options Outstanding, Vested and expected to vest | [1] | 6,378 |
Weighted Average Exercise Price per share | ||
Options Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 50.27 | |
Options Granted, Weighted Average Exercise Price | 25.38 | |
Options Exercised, Weighted Average Exercise Price | 17.08 | |
Options Cancelled or expired, Weighted Average Exercise Price | 46.74 | |
Options Outstanding, Weighted Average Exercise Price, Ending balance | 46.42 | |
Options Exercisable, Weighted Average Exercise Price | 55.30 | |
Options Vested and expected to vest, Weighted Average Exercise Price | [1] | $ 46.42 |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value | ||
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 9 months 18 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 3 years 10 months 24 days | |
Options Vested and expected to vest, Weighted Average Remaining Contractual Life | [1] | 5 years 9 months 18 days |
[1] | 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 _6
Stock Based Awards and Other Equity Instruments - Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Risk free interest rate | 1.18% | 2.42% |
Expected term (in years) | 5 years 3 months 18 days | 5 years 2 months 8 days |
Expected volatility | 43.13% | 42.17% |
Weighted-average grant date fair value | $ 10.11 | $ 21.80 |
Stock Based Awards and Other _7
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Details) - Restricted Stock Units $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)$ / sharesshares | ||
RSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 8,469 | |
Unvested RSUs, Granted | shares | 4,834 | |
Unvested RSUs, Vested and released | shares | (2,397) | [1] |
Unvested RSUs, Cancelled | shares | (2,858) | |
Unvested outstanding, Ending balance | shares | 8,048 | |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 45.42 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 25.20 | |
Weighted Average Grant-Date Fair Value Per Share, Vested and released | $ / shares | 47.67 | [1] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 38 | |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 34.96 | |
Aggregate Intrinsic Value | ||
Unvested RSUs outstanding, Aggregate Intrinsic Value | $ | $ 153 | |
[1] | Inclusive of 628,545 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the Tripadvisor, Inc. 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the unaudited condensed consolidated statements of cash flows. |
Stock Based Awards and Other _8
Stock Based Awards and Other Equity Instruments - Summary of RSU Activity (Parenthetical) (Details) | 6 Months Ended |
Jun. 30, 2020shares | |
Restricted Stock Units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
RSUs withheld to satisfy withholding tax requirements | 628,545 |
Stock Based Awards and Other _9
Stock Based Awards and Other Equity Instruments - Summary of MSUs Activity (Details) - MSUs $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)$ / sharesshares | ||
MSUs outstanding | ||
Unvested outstanding, Beginning balance | shares | 389 | |
Unvested MSUs, Granted | shares | 133 | [1] |
Unvested MSUs, Cancelled | shares | (24) | |
Unvested outstanding, Ending balance | shares | 498 | |
Weighted Average Grant-Date Fair Value Per Share | ||
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Beginning balance | $ / shares | $ 40.99 | |
Weighted Average Grant-Date Fair Value Per Share, Granted | $ / shares | 28.15 | [1] |
Weighted Average Grant-Date Fair Value Per Share, Cancelled | $ / shares | 58.63 | |
Unvested outstanding, Weighted Average Grant-Date Fair Value Per Share, Ending balance | $ / shares | $ 36.71 | |
Aggregate Intrinsic Value | ||
Unvested MSUs outstanding, Aggregate Intrinsic Value | $ | $ 9 | |
[1] | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of the Nasdaq Composite Total Return Index. Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200% of the target number of MSUs originally granted, or to be issued none at all. These MSUs were granted under the 2018 Plan. |
Stock Based Awards and Other_10
Stock Based Awards and Other Equity Instruments - Summary of MSUs Activity (Parenthetical) (Details) - MSUs - Employees | 6 Months Ended |
Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Percentage of originally granted shares that may be earned upon performance achievement, maximum | 200.00% |
Percentage of originally granted shares that may be earned upon performance achievement, minimum | 0.00% |
Stock awards vesting term | MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of the Nasdaq Composite Total Return Index. |
Performance measurement period start date | Jan. 1, 2020 |
Performance measurement period end date | Dec. 31, 2022 |
Stock Based Awards and Other_11
Stock Based Awards and Other Equity Instruments -Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Stock Options | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 29 |
Weighted average period remaining (in years) | 2 years 8 months 12 days |
RSUs/MSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Weighted average period remaining (in years) | 2 years 1 month 6 days |
Unrecognized compensation expense | $ 212 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements - Schedule of Cash Equivalents and Marketable Securities (Details) $ in Millions | Jun. 30, 2020USD ($) | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | $ 115 | |
Cash and Cash Equivalents | 115 | [1] |
Level 2 | Term Deposits | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Amortized Cost | 115 | |
Cash and Cash Equivalents | $ 115 | [1] |
[1] | Unrealized gains or losses related to our cash equivalents were not material. |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Financial instruments, maturities period | 90 days | |
Short-term marketable securities outstanding | $ 0 | $ 0 |
Long-term marketable securities outstanding | 0 | 0 |
Net gain related to forward contracts | $ 1,000,000 | |
Foreign currency exchange contracts maturity period, maximum | 90 days | |
Equity securities without readily determinable fair value | $ 2,000,000 | 14,000,000 |
Redemption value of shares in return for collateralized note receivable | 10,000,000 | |
Other Long-Term Assets | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Redeemable noncontrolling interest, settlement amount | $ 20,000,000 | |
Percentage of notes receivable due in 5 years | 50.00% | |
Percentage of notes receivable due in 10 years | 50.00% | |
Allowance for credit loss under ASC 326 | $ 3,000,000 | |
Net of accumulated allowance for credit losses, Carrying value | $ 14,000,000 | |
Chelsea Investment Holding Company PTE, Ltd | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity method investment, ownership percentage | 40.00% | |
Impairment loss on equity method investments | $ 0 | 0 |
Chelsea Investment Holding Company PTE, Ltd | Non-Marketable Investments | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Equity method investments | $ 39,000,000 | $ 41,000,000 |
Customer Concentration Risk | Sales | Expedia | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Customer concentration risk | 10.00% | |
Customer Concentration Risk | Sales | Booking | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Customer concentration risk | 10.00% | |
Customer Concentration Risk | Sales | Expedia and Booking | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Customer concentration risk | 33.00% |
Financial Instruments and Fai_5
Financial Instruments and Fair Value Measurements - Notional Principal Amounts of Outstanding Derivative Instruments (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | ||
Derivatives Fair Value [Line Items] | |||
Derivative instruments not designated as hedging instruments, description of terms | We use forward contracts to reduce the effects of foreign currency exchange rate fluctuations on our cash flows. For the three and six months ended June 30, 2020 and 2019, respectively, our forward contracts have not been designated as hedges and generally had maturities of less than 90 days. | ||
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | |||
Derivatives Fair Value [Line Items] | |||
Foreign currency exchange - forward contracts | [1],[2] | $ 10,000,000 | |
[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 June 30, 2020 and one outstanding derivative contract as of December 31, 2019. These outstanding derivatives are not designated as hedging instruments and have an original maturity period of 90 days or less. | ||
[2] | The fair value of our outstanding derivative as of December 31, 2019 was not material. |
Financial Instruments and Fai_6
Financial Instruments and Fair Value Measurements - Notional Principal Amounts of Outstanding Derivative Instruments (Parenthetical) (Details) - Contract | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Derivatives Fair Value [Line Items] | ||
Maximum maturity period of outstanding derivatives are not designated as hedging instruments | 90 days | |
Not Designated as Hedging Instrument | Foreign Exchange-forward Contracts | ||
Derivatives Fair Value [Line Items] | ||
Number of outstanding derivatives contracts | 0 | 1 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020USD ($)ReportingUnit | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Number of distinct reporting units | ReportingUnit | 4 |
Goodwill, impairment loss | $ | $ 0 |
Goodwill - Summary of Goodwill
Goodwill - Summary of Goodwill Activity by Reportable Segments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2019 | $ 840 |
Balance as of June 30, 2020 | 837 |
Operating Segments | |
Goodwill [Line Items] | |
Balance as of December 31, 2019 | 840 |
Disposition | (6) |
Other adjustments | 3 |
Balance as of June 30, 2020 | 837 |
Operating Segments | Hotels, Media & Platform | |
Goodwill [Line Items] | |
Balance as of December 31, 2019 | 405 |
Re-allocation of goodwill | 2 |
Balance as of June 30, 2020 | 407 |
Operating Segments | Experiences & Dining Segment | |
Goodwill [Line Items] | |
Balance as of December 31, 2019 | 333 |
Other adjustments | 6 |
Balance as of June 30, 2020 | 339 |
Operating Segments | Other | |
Goodwill [Line Items] | |
Balance as of December 31, 2019 | 102 |
Re-allocation of goodwill | (2) |
Disposition | (6) |
Other adjustments | (3) |
Balance as of June 30, 2020 | $ 91 |
Debt - Two Thousand Fifteen Cre
Debt - Two Thousand Fifteen Credit Facility - Additional Information (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | May 05, 2020 | Dec. 31, 2019 | May 12, 2017 | Jun. 30, 2015 |
Debt Instrument [Line Items] | ||||||||||
Total interest expense and commitments fees | $ 7,000,000 | $ 2,000,000 | $ 9,000,000 | $ 3,000,000 | ||||||
Second Amendment | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum liquidity required | $ 150,000,000 | |||||||||
2015 Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total interest expense and commitments fees | 5,000,000 | $ 1,000,000 | $ 6,000,000 | $ 1,000,000 | ||||||
2015 Credit Facility | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit facility, expiration period | 5 years | |||||||||
Outstanding borrowings | $ 700,000,000 | 700,000,000 | $ 700,000,000 | $ 0 | ||||||
Amount borrowed | $ 700,000,000 | |||||||||
Line Of Credit Facility Unused Capacity Commitment Fee Percentage | 0.50% | 0.50% | ||||||||
Lender fees and debt financing costs capitalized | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | |||||||
2015 Credit Facility | Revolving Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.25% | |||||||||
Floor Interest Rate | 1.00% | |||||||||
2015 Credit Facility | Revolving Credit Facility | Eurocurrency Spread | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 3.25% | |||||||||
2015 Credit Facility | First Amendment | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing capacity under Credit Facility | $ 1,200,000,000 | $ 1,000,000,000 | ||||||||
Credit facility, maturity date | Jun. 26, 2020 | |||||||||
Credit facility, extended maturity date | May 12, 2022 | |||||||||
Credit Facility, description | On May 12, 2017, the 2015 Credit Facility was amended to, among other things, (i) increase the aggregate amount of revolving loan commitments available from $1.0 billion to $1.2 billion; and (ii) extend the maturity date of the 2015 Credit Facility from June 26, 2020 to May 12, 2022 (the “First Amendment”). | |||||||||
2015 Credit Facility | Second Amendment | Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing capacity under Credit Facility | $ 1,000,000,000 | |||||||||
Credit Facility, description | On May 5, 2020, we amended our 2015 Credit Facility (“Second Amendment”) to, among other things, suspend the leverage ratio covenant on this facility beginning in the second quarter of 2020 and ending prior to September 30, 2021 (or such earlier date as elected by the Company), and replacing it with a minimum liquidity covenant, or the Leverage Covenant Holiday, that requires us to maintain $150 million of unrestricted cash, cash equivalents and short-term investments less deferred merchant payables plus available revolver capacity, which will apply only during the Leverage Covenant Holiday, provide collateral to secure the obligations under the agreement, as well as downsizing its capacity to $1.0 billion from $1.2 billion |
Debt - Chinese Credit Facility
Debt - Chinese Credit Facility - Additional Information (Details) - Chinese Credit Facility - Chinese Credit Facility Boa - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Borrowing capacity under Credit Facility | $ 30,000,000 | |
Period of credit facility | 1 year | |
Outstanding borrowings | $ 0 | $ 0 |
Debt - Issuance of Senior Notes
Debt - Issuance of Senior Notes - Additional Information (Details) - Subsequent Event - 7.000% senior notes due July 15, 2025 - USD ($) | Jul. 09, 2020 | Jul. 31, 2020 | Sep. 30, 2020 |
Debt Instrument [Line Items] | |||
Debt instrument, issuance date | Jul. 9, 2020 | ||
Debt instrument, aggregate principal amount | $ 500,000,000 | ||
Debt instrument, interest rate | 7.00% | ||
Debt Instrument, date of first required payment of interest | Jan. 15, 2021 | ||
Debt Instrument, maturity date | Jul. 15, 2025 | ||
Debt instrument, net proceeds | $ 490,000,000 | $ 490,000,000 | |
Debt instrument, issuances costs | $ 10,000,000 | $ 10,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Mar. 27, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Income Taxes [Line Items] | ||||||
Temporary benefit, term of net operating loss carryback provisions,under CARES Act | 5 years | |||||
Term of qualified leasehold improvements property, Prior to enactment of CARES Act | 39 years | |||||
Term of qualified leasehold improvements property, After enactment of CARES Act | 15 years | |||||
Percentage eligible for tax bonus depreciation, and potentially other provisions under CARES Act | 100.00% | |||||
Income tax expense (benefit) | $ (26,000,000) | $ 34,000,000 | $ (38,000,000) | $ 41,000,000 | ||
Income tax rate differential benefit amount | (5,000,000) | (19,000,000) | ||||
Accrued interest liability | 24,000,000 | 24,000,000 | ||||
Accrued penalties | $ 0 | 0 | ||||
Cumulative income tax expense recorded upon non-company related litigation | $ 15,000,000 | |||||
Minimum [Member] | Expedia | IRS | Tax Years 2009 through 2013 | ||||||
Income Taxes [Line Items] | ||||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | 50,000,000 | |||||
Maximum | Expedia | IRS | Tax Years 2009 through 2013 | ||||||
Income Taxes [Line Items] | ||||||
Increase in income tax expense due to proposed adjustments related to transfer pricing with foreign subsidiary, estimated | $ 60,000,000 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Details of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | |
Payables And Accruals [Abstract] | |||
Accrued salary, bonus, and related benefits | $ 35 | $ 74 | |
Accrued marketing costs | 12 | 27 | |
Current income tax payables | 3 | 14 | |
Finance lease liability - current portion | 5 | 5 | |
Operating leases liability - current portion | 20 | 20 | |
Restructuring and other related reorganization costs | [1] | 7 | 1 |
Other | 59 | 62 | |
Total | $ 141 | $ 203 | |
[1] | (1) The Company incurred pre-tax restructuring and other related reorganization costs of $33 million and $42 million during the three and six months ended June 30, 2020, respectively. The costs consist of employee severance and related benefits. In response to the COVID-19 pandemic, during the second quarter of 2020, the Company committed to restructuring actions intended to reinforce its financial position, reduce its cost structure, and improve operational efficiencies, which have resulted in headcount reductions. In addition, we engaged in a smaller scale restructuring action in the first quarter of 2020 to reduce our cost structure and improve our operational efficiencies, which resulted in headcount reductions for which we recognized $9 million in restructuring and other related reorganization costs. The following table summarizes our restructuring and other related reorganization costs for the six months ended June 30, 2020: Restructuring and other related reorganization costs (in millions) Accrued liability as of December 31, 2019 $ 1 Charges 42 Payments (36 ) Accrued liability as of June 30, 2020 $ 7 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Details of Accrued Expenses and Other Current Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | |
Accrued Expenses and Other Current Liabilities [Line Items] | |||
Pre-tax restructuring and other related reorganization costs | $ 33 | $ 42 | |
Employee Severance and Related Benefits | |||
Accrued Expenses and Other Current Liabilities [Line Items] | |||
Pre-tax restructuring and other related reorganization costs | $ 33 | $ 9 | $ 42 |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities - Summary of Restructuring and Other Related Reorganization Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Restructuring Cost And Reserve [Line Items] | ||
Accrued liability as of December 31, 2019 | $ 203 | |
Charges | $ 33 | 42 |
Accrued liability as of June 30, 2020 | 141 | 141 |
Restructuring and Other Related Reorganization Costs | ||
Restructuring Cost And Reserve [Line Items] | ||
Accrued liability as of December 31, 2019 | 1 | |
Charges | 42 | |
Payments | (36) | |
Accrued liability as of June 30, 2020 | $ 7 | $ 7 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Jan. 31, 2018 | |
Schedule Of Capitalization Equity [Line Items] | ||||||
Repurchase of common stock, shares | 0 | 0 | 4,707,450 | 0 | ||
Aggregate cost of shares repurchased, common stock | $ 115,000,000 | |||||
Average price of shares repurchased, common stock | $ 24.32 | |||||
Remaining authorized share repurchased amount | $ 75,000,000 | $ 75,000,000 | $ 190,000,000 | |||
Treasury stock, shares | 18,844,614 | 18,844,614 | 14,116,534 | |||
Aggregate cost of treasury stock | $ 722,000,000 | $ 722,000,000 | $ 607,000,000 | |||
Maximum | ||||||
Schedule Of Capitalization Equity [Line Items] | ||||||
Repurchase of shares of common stock authorized | $ 250,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reportable segment | 2 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | $ 59 | $ 422 | $ 337 | $ 798 | ||||
Adjusted EBITDA | (74) | 128 | (34) | 217 | |||||
Depreciation and amortization | (32) | (30) | (64) | (61) | |||||
Stock-based compensation | (25) | (32) | (51) | (60) | |||||
Restructuring and other related reorganization costs | (33) | (42) | |||||||
Operating income (loss) | (164) | 66 | (191) | 96 | |||||
Other income (expense), net | (15) | 2 | (16) | 5 | |||||
Income (loss) before income taxes | (179) | 68 | (207) | 101 | |||||
(Provision) benefit for income taxes | 26 | (34) | 38 | (41) | |||||
Net income (loss) | (153) | 34 | (169) | 60 | |||||
Hotels, Media & Platform | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | 38 | 254 | 207 | 508 | ||||
Experiences & Dining Segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [1] | 14 | 125 | 97 | 206 | ||||
Other | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | [2] | 7 | 43 | 33 | 84 | ||||
Adjusted EBITDA | [2] | (3) | 13 | 3 | 22 | ||||
Operating Segments | Hotels, Media & Platform | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 38 | [3] | 254 | [4] | 207 | [3] | 508 | [4] | |
Adjusted EBITDA | (33) | [3] | 108 | [4] | 20 | [3] | 212 | [4] | |
Operating Segments | Experiences & Dining Segment | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenue | 14 | 125 | 97 | 206 | |||||
Adjusted EBITDA | (38) | 7 | (57) | (17) | |||||
Corporate and Unallocated | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Depreciation and amortization | (32) | (30) | (64) | (61) | |||||
Stock-based compensation | (25) | $ (32) | (51) | $ (60) | |||||
Restructuring and other related reorganization costs | $ (33) | $ (42) | |||||||
[1] | Our revenue is recognized primarily at a point in time for all reported segments. | ||||||||
[2] | Other consists of the combination of our Rentals, Flights & Car, Cruises, and Tripadvisor China business units and does not constitute a reportable segment | ||||||||
[3] | Includes allocated corporate general and administrative costs of $16 million and $34 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $1 million and $5 million for the three and six months ended June 30, 2020, respectively. | ||||||||
[4] | Includes allocated corporate general and administrative costs of $17 million and $31 million and Tripadvisor-branded advertising expenses (primarily television advertising) of $26 million and $55 million for the three and six months ended June 30, 2019, respectively. |
Segment Information - Summary_2
Segment Information - Summary of Segment Information (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Segment Reporting Information [Line Items] | |||||
General and administrative | [1] | $ 43 | $ 45 | $ 94 | $ 88 |
Operating Segments | Hotels, Media & Platform | |||||
Segment Reporting Information [Line Items] | |||||
General and administrative | 16 | 17 | 34 | 31 | |
Advertising expense | $ 1 | $ 26 | $ 5 | $ 55 | |
[1] | Includes stock-based compensation expense as follows (Note 5): |
Other Income (Expense), Net - S
Other Income (Expense), Net - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Other Income And Expenses [Abstract] | |||||
Foreign currency exchange rates gains (losses), net | [1] | $ 1 | $ (1) | $ 2 | $ (1) |
Earnings (losses) from equity method investment, net | (1) | (1) | |||
Loss on sale of business | [2] | (5) | (5) | ||
Other, net | (4) | (5) | |||
Total | $ (9) | $ (1) | $ (9) | $ (1) | |
[1] | Our foreign currency exchange gains (losses), net, are generally related to foreign exchange transaction gains and losses from the conversion of the transaction currency to the functional currency, partially offset by the foreign currency forward contract gains and losses. | ||||
[2] | Related to loss on disposal on the sale of our SmarterTravel business during the three months ended June 30, 2020. |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - 7.000% senior notes due July 15, 2025 - USD ($) | Jul. 09, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 |
Subsequent Event [Line Items] | ||||
Debt instrument, redemption, description | The Company has the option to redeem all or a portion of the Senior Notes at any time on or after July 15, 2022 at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any. The Company may also redeem all or any portion of the Senior Notes at any time prior to July 15, 2022, at a price equal to 100% of the aggregate principal amount thereof plus a make-whole premium and accrued and unpaid interest, if any. In addition, before July 15, 2022, the Company may redeem up to 40% of the aggregate principal amount of the Senior Notes with the net proceeds of certain equity offerings at the redemption price set forth in the Indenture, provided that certain conditions are met. Under certain circumstances, until 120 days after the issue date, the Company may redeem in the aggregate up to 40% of the aggregate principal amount of the Senior Notes in an amount not to exceed the amount of the net cash proceeds of any loan received pursuant to a Regulatory Debt Facility (as defined in the Indenture), so long as at least 60% of the aggregate principal amount of the notes remain outstanding after each such redemption. | |||
Debt Instrument, redemption price, percentage of principal amount redeemed | 100.00% | |||
Debt instrument redemption period | 120 days | |||
Debt instruments outstanding percentage | 60.00% | |||
Debt instruments offer to purchase percentage of principal amount repurchased | 101.00% | |||
Before July 15, 2022 | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, redemption price, percentage | 40.00% | |||
Until 120 Days After Issue | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, redemption price, percentage | 40.00% | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, aggregate principal amount | $ 500,000,000 | |||
Debt instrument, interest rate | 7.00% | |||
Debt instrument, issuance date | Jul. 9, 2020 | |||
Debt Instrument, date of first required payment of interest | Jan. 15, 2021 | |||
Debt Instrument, maturity date | Jul. 15, 2025 | |||
Debt instrument, net proceeds | $ 490,000,000 | $ 490,000,000 | ||
Debt instrument, issuances costs | $ 10,000,000 | $ 10,000,000 |