Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | Liberty TripAdvisor Holdings, Inc. | ||
Entity Central Index Key | 1,606,745 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2.2 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Series A | |||
Entity Common Stock, Shares Outstanding | 71,951,637 | ||
Series B | |||
Entity Common Stock, Shares Outstanding | 2,929,777 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 644 | $ 509 |
Trade and other receivables, net | 181 | 153 |
Marketable securities | 47 | 108 |
Other current assets | 34 | 41 |
Total current assets | 906 | 811 |
Investments in available-for-sale securities | 37 | 31 |
Property and equipment, at cost | 216 | 174 |
Accumulated depreciation | (36) | (36) |
Property and equipment, net | 180 | 138 |
Intangible Assets [Abstract] | ||
Goodwill | 3,689 | 3,691 |
Trademarks | 1,803 | 1,819 |
Intangible assets not subject to amortization | 5,492 | 5,510 |
Intangible assets subject to amortization, net | 625 | 841 |
Other assets, at cost, net of accumulated amortization | 45 | 35 |
Total assets | 7,285 | 7,366 |
Current liabilities: | ||
Accounts payable | 121 | 118 |
Accrued liabilities | 129 | 121 |
Current portion of debt | 1 | 78 |
Deferred revenue | 64 | 57 |
Other current liabilities | 5 | 21 |
Total current liabilities | 320 | 395 |
Total long-term debt | 620 | 662 |
Deferred income tax liabilities | 719 | 808 |
Other liabilities | 190 | 154 |
Total liabilities | $ 1,849 | $ 2,019 |
Equity: | ||
Preferred Stock value | ||
Additional paid-in capital | $ 260 | $ 296 |
Accumulated other comprehensive earnings, net of taxes | (25) | (12) |
Retained earnings | 572 | 612 |
Total stockholders' equity | 808 | 897 |
Noncontrolling interests in equity of combined companies | 4,628 | 4,450 |
Total equity | 5,436 | 5,347 |
Total liabilities and equity | 7,285 | 7,366 |
Series A | ||
Equity: | ||
Common stock value | $ 1 | $ 1 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Trade and other receivables, net of allowance for doubtful accounts | $ 6 | $ 7 |
Equity: | ||
Preferred Stock, Par value | $ 0.01 | $ 0.01 |
Preferred Stock | ||
Equity: | ||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series A | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 71,920,260 | 71,555,730 |
Common stock, shares outstanding | 71,920,260 | 71,555,730 |
Series B | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock shares issued | 2,929,777 | 2,929,777 |
Common stock, shares outstanding | 2,929,777 | 2,929,777 |
Series C | ||
Equity: | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | |||
Service Revenue, Net | $ 1,492 | $ 1,246 | $ 945 |
Other Revenue, Net | 73 | 83 | 89 |
Total revenue, net | 1,565 | 1,329 | 1,034 |
Operating costs and expenses: | |||
Operating expense, including stock-based compensation (note 2) | 345 | 294 | 237 |
Selling, general and administrative, including stock-based compensation | 935 | 667 | 496 |
Depreciation and amortization | 268 | 298 | 315 |
Impairment of intangible assets | 2 | 2 | 3 |
Total operating costs and expenses | 1,550 | 1,261 | 1,051 |
Operating income (loss) | 15 | 68 | (17) |
Other income (expense): | |||
Interest expense | (28) | (13) | (12) |
Other, net | 17 | (11) | 1 |
Total other income (expense) | (11) | (24) | (11) |
Earnings (loss) before income taxes | 4 | 44 | (28) |
Income tax (expense) benefit | 10 | (35) | 55 |
Net earnings (loss) | 14 | 9 | 27 |
Less net earnings (loss) attributable to noncontrolling interests | 54 | 31 | 34 |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (40) | $ (22) | $ (7) |
Earnings Per Share, Basic | $ (0.53) | $ (0.30) | $ (0.10) |
Earnings Per Share, Diluted | $ (0.53) | $ (0.30) | $ (0.10) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings (loss) | $ 14 | $ 9 | $ 27 |
Other comprehensive earnings (loss), net of taxes: | |||
Foreign currency translation adjustments | (58) | (57) | (4) |
Reclassification adjustment on sale of business | 1 | ||
Other comprehensive earnings (loss) | (57) | (57) | (4) |
Comprehensive earnings (loss) | (43) | (48) | 23 |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | 9 | (14) | 31 |
Comprehensive earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (52) | $ (34) | $ (8) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net earnings (loss) | $ 14 | $ 9 | $ 27 |
Adjustments to reconcile net earnings to net cash provided by operating activities | |||
Depreciation and amortization | 268 | 298 | 315 |
Stock-based compensation | 82 | 74 | 60 |
Excess tax benefit from stock-based compensation | (31) | (20) | (8) |
Non-cash contribution to charitable foundation (note 12) | 67 | ||
Gains (losses) on transactions, net (note 4) | (19) | 1 | |
Impairment of intangible assets | 2 | 2 | 3 |
Deferred income tax expense (benefit) | (85) | (70) | (117) |
Non-cash interest on margin loans | 17 | 4 | |
Other noncash charges (credits), net | (8) | 10 | 1 |
Changes in operating assets and liabilities | |||
Current and other assets | (31) | (16) | 3 |
Payables and other liabilities | 84 | 74 | 51 |
Net cash provided (used) by operating activities | 360 | 365 | 336 |
Cash flows from investing activities: | |||
Capital expended for property and equipment | (112) | (90) | (60) |
Cash (paid) for acquisitions, net of cash acquired (note 3) | (29) | (331) | (35) |
Purchases of short term investments and other marketable securities | (205) | (251) | (432) |
Proceeds from short term and other marketable securities | 258 | 429 | 325 |
Other investing activities, net | 25 | 1 | (3) |
Net cash provided (used) by investing activities | (63) | (242) | (205) |
Cash flows from financing activities: | |||
Borrowings of debt, net of financing costs | 291 | 429 | 43 |
Repayments of debt | (431) | (43) | (66) |
Distribution to Parent Company | (348) | ||
Shares repurchased by subsidiary | (145) | ||
Payment of minimum withholding taxes on net share settlements of equity awards | (72) | (33) | (14) |
Excess tax benefit from stock-based compensation | 31 | 20 | 8 |
Shares issued by subsidiary | 12 | 3 | 27 |
Option exercises | 5 | 12 | |
Other financing activities, net | 12 | ||
Net cash provided (used) by financing activities | (152) | 40 | (147) |
Effect of foreign currency exchange rates on cash | (10) | (8) | 1 |
Net increase (decrease) in cash and cash equivalents | 135 | 155 | (15) |
Cash and cash equivalents at beginning of period | 509 | 354 | 369 |
Cash and cash equivalents at end of period | $ 644 | $ 509 | $ 354 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Equity - USD ($) $ in Millions | Common Stock [Member] | Additional Paid-in Capital [Member] | Parent's investment [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at beginning of the period at Dec. 31, 2012 | $ 289 | $ 1 | $ 989 | $ 4,340 | $ 5,619 | ||
Net earnings (loss) | (7) | 34 | 27 | ||||
Other comprehensive earnings (loss) | (1) | (3) | (4) | ||||
Stock compensation | 15 | 49 | 64 | ||||
Shares issued by subsidiary | (7) | 34 | 27 | ||||
Shares repurchased by subsidiary | (63) | (82) | (145) | ||||
Other | (8) | 1 | (7) | ||||
Balance at end of the period at Dec. 31, 2013 | 226 | 982 | 4,373 | 5,581 | |||
Net earnings (loss) | (22) | 31 | 9 | ||||
Other comprehensive earnings (loss) | (12) | (45) | (57) | ||||
Stock compensation | $ 7 | 11 | 63 | 81 | |||
Stock Issued During Period, Value, Stock Options Exercised | 13 | 2 | 15 | ||||
Minimum withholding taxes on net share settlements of stock based compensation | (1) | (32) | (33) | ||||
Excess tax benefits on stock‑based compensation | 1 | 3 | 16 | 20 | |||
Intercompany taxes and debt forgiven by former parent | 75 | 75 | |||||
Fair value of stock options assumed in connection with acquisition | 1 | 4 | 5 | ||||
Change in capitalization in connection with Trip Spin-Off | $ 1 | 277 | (278) | ||||
Distribution to Liberty | (348) | (348) | |||||
Shares issued by subsidiary | (2) | $ (7) | 9 | ||||
Other | (1) | (1) | |||||
Balance at end of the period at Dec. 31, 2014 | 1 | 296 | (12) | 612 | 4,450 | 5,347 | |
Net earnings (loss) | (40) | 54 | 14 | ||||
Other comprehensive earnings (loss) | (12) | (45) | (57) | ||||
Stock compensation | 24 | 67 | 91 | ||||
Stock Issued During Period, Value, Stock Options Exercised | 5 | 5 | |||||
Minimum withholding taxes on net share settlements of stock based compensation | (72) | (72) | |||||
Excess tax benefits on stock‑based compensation | 10 | 21 | 31 | ||||
Shares issued by subsidiary | (8) | 20 | 12 | ||||
Stock settled charitable contribution by subsidiary (note 12) | 6 | 61 | 67 | ||||
Other | (1) | (1) | (2) | ||||
Balance at end of the period at Dec. 31, 2015 | $ 1 | $ 260 | $ (25) | $ 572 | $ 4,628 | $ 5,436 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentatio n During October 2013, the Board of Directors of Liberty Interactive Corporation and its subsidiaries (“Liberty”) authorized a plan to distribute to the stockholders of Liberty’s Liberty Ventures common stock shares of a wholly-owned subsidiary, Liberty TripAdvisor Holdings, Inc. (“TripCo” or the “Company”) (the “Trip Spin-Off”). TripCo holds the subsidiaries TripAdvisor, Inc. (“TripAdvisor”) and BuySeasons, Inc., which includes the retail businesses of BuyCostumes.com and Celebrate Express (“BuySeasons”), both of which operate as stand-alone operating entities. Both TripAdvisor and BuySeasons have more revenue in the third quarter, based on a higher travel research period and the Halloween period, respectively, as compared to the other quarters of the year. The Trip Spin-Off was completed on August 27, 2014 and effected as a pro-rata dividend of shares of TripCo to the stockholders of Series A and Series B Liberty Ventures common stock of Liberty. The Trip Spin-Off was intended to be tax-free and was accounted for at historical cost due to the pro rata nature of the distribution to shareholders of Liberty Ventures common stock. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and represent a combination of the historical financial information of TripAdvisor, a combined company since December 11, 2012 (see note 4 for a more detailed discussion of transactions related to TripAdvisor), and BuySeasons. These financial statements refer to the combination of TripAdvisor and BuySeasons as “TripCo,” “the Company,” “us,” “we” and “our” in the notes to the consolidated financial statements. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. Description of Business TripAdvisor is an online travel company, empowering users to plan and book the perfect trip. TripAdvisor’s travel research platform aggregates reviews and opinions of members about accommodations, destinations, activities and attractions, and restaurants throughout the world so that its users have access to trusted advice wherever their trip takes them. TripAdvisor’s platform not only helps users plan their trip with its unique user-generated content, but also enables users to compare real-time pricing and availability so that they can book hotels, vacation rentals, flights, activities and attractions, and restaurants. TripAdvisor-branded websites include tripadvisor.com in the United States and localized versions of the website in 46 countries . In addition to the flagship TripAdvisor brand, TripAdvisor manages and operates 23 other travel media brands, connected by the common goal of providing comprehensive travel planning resources across the travel sector. A substantial portion of TripAdvisor’s revenue is derived from advertising, primarily through click-based advertising and, to a lesser extent, display-based advertising sales. In addition, TripAdvisor earns revenue through a combination of subscription-based and transaction-based offerings including: Business Listings; subscription and commission-based offerings from its Vacation Rental products, transaction revenue from selling room nights through Jetsetter and Tingo, selling destination activities and fulfilling online restaurant reservations through Viator and Lafourchette, respectively , and other revenue including content licensing. BuySeasons is an online retailer and supplier of costumes, accessories, seasonal décor, and party supplies. BuySeasons is dedicated to offering a large selection at affordable prices through its brands BuyCostumes.com and Celebrate Express. BuySeasons acquired the family friendly retailer, Celebrate Express, in 2008. BuySeasons also operates a private-label drop ship program for other Internet retailers. Spin-Off of TripCo from Liberty Following the Trip Spin-Off, Liberty and TripCo operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Trip Spin-Off, TripCo entered into certain agreements, including the reorganization agreement, the services agreement, the facilities sharing agreement and the tax sharing agreement, with Liberty and/or Liberty Media Corporation (“Liberty Media”) (or certain of their subsidiaries) in order to govern certain of the ongoing relationships between the companies after the Trip Spin-Off and to provide for an orderly transition. The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Trip Spin-Off, certain conditions to the Trip Spin-Off and provisions governing the relationship between TripCo and Liberty with respect to and resulting from the Trip Spin-Off. Pursuant to the services agreement, Liberty Media provides TripCo with general and administrative services including legal, tax, accounting, treasury and investor relations support. TripCo will reimburse Liberty Media for direct, out-of-pocket expenses incurred by Liberty Media in providing these services and TripCo will pay a services fee to Liberty Media under the services agreement that will be subject to adjustment semi-annually , as necessary . Under the facilities sharing agreement, TripCo will share office space with Liberty, Liberty Media and Liberty Broadband Corporation (“LBC”) and related amenities at Liberty Media’s corporate headquarters in Englewood, Colorado. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and TripCo and other agreements related to tax matters. Pursuant to the tax sharing agreement, TripCo has agreed to indemnify Liberty, subject to certain limited exceptions, for losses and taxes resulting from the Trip Spin-Off to the extent such losses or taxes result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by TripCo (applicable to actions or failures to act by TripCo and its subsidiaries following the completion of the Trip Spin-Off). In October 2014, the Internal Revenue Service (“IRS”) completed its examination of the Trip Spin-Off and notified Liberty that it agreed with the nontaxable characterization of the transaction. Liberty execute d a Closing Agreement with the IRS documenting this conclusion in 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Cash and Cash Equivalents Cash consists of cash deposits held in global financial institutions. Cash equivalents consist of highly liquid investments with maturities of three months or less at the time of acquisition. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally due within 30 days and are recorded net of an allowance for doubtful accounts. Such allowance aggregated $ 6 million and $ 7 million at December 31, 2015 and 2014 , respectively. For accounts outstanding longer than the contractual payment terms, the Company determines an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. Inventory Inventory, which consists of party and costume merchandise held for sale, is stated at the lower of cost or market, determined on a first-in, first-out method. Inventory is stated net of valuation adjustments and inventory obsolescence reserves, equal to the difference between the cost of inventory and the estimated market value, of approximately $ 3 million as of December 31, 2015 and 2014 The Company recorded $ 3 million and $ 3 million reductions in the value of its inventory during the years ended December 31, 2015 and 2014 due to the amount of aged inventory on-hand. These charges are included in operating expenses in the statements of operations. Additionally, the Company sold approximately $ 1 million and $4 million of previously reserved inventory during 2015 and 2014, respectively. Investments All marketable debt and equity securities held by the Company are classified as available-for-sale (“AFS”) and are carried at fair value generally based on quoted market prices. Fair values are determined for each individual security in the investment portfolio. Unrealized gains and losses, net of taxes, arising from changes in fair value are reported in accumulated other comprehensive income (loss) as a component of equity. The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Marketable debt securities are classified as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited to money market funds and mutual funds, as either short-term or long-term based on the nature of each security and its availability for use in current operations. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and liquidity and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years. Property and Equipment Property and equipment consists of the following (amounts in millions): December 31, 2015 2014 Building $ — Leasehold improvements Computer equipment Furniture, office equipment and other Construction in progress — Total property and equipment $ Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment and furniture, office equipment and other. Leasehold improvements are depreciated using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease. TripAdvisor’s building, which is considered an asset for accounting purposes, is depreciated over its estimated useful life of 40 years. Construction-in-progress costs were primarily related to TripAdvisor’s build-to-suit lease obligation during the year ended December 31, 2014, as discussed in note 12. Leases The Company, through its consolidated companies, leases facilities in several countries around the world and certain equipment under non-cancelable lease agreements. The terms of some of the lease agreements provide for rental payments on a graduated basis. Rent expense is recognized on a straight-line basis over the lease period and accrued as rent expense incurred but not paid. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If we continue to be the deemed owner, the facilities are accounted for as financing leases. Intangible Assets Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible assets with indefinite useful lives (collectively, "indefinite lived intangible assets") are not amortized, but instead are tested for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed during the fourth quarter of each year. The Company utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In evaluating goodwill on a qualitative basis the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current and prior years for other purposes. If a step one test is considered necessary based on the qualitative factors, the Company compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in Liberty's valuation analysis are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There is no assurance that actual results in the future will approximate these forecasts. For those reporting units whose carrying value exceeds the fair value, a second test is required to measure the impairment loss (the "Step 2 Test"). In the Step 2 Test, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit with any residual value being allocated to goodwill. The difference between such allocated amount and the carrying value of the goodwill is recorded as an impairment charge. The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See note 6 for discussion of goodwill impairment s. Websites and Internal Use Software Development Costs Certain costs incurred during the application development stage related to the development of websites and internal use software are capitalized and included in other intangibles. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. Costs related to the planning and post-implementation phases of software and website development are expensed as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. Impairment of Long-lived Assets The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets (other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is to be recognized. Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. Noncontrolling Interests Noncontrolling interest relates to the equity ownership interest in TripAdvisor that the Company does not own. The Company reports noncontrolling interests of consolidated companies within equity in the consolidated balance sheets and the amount of net income attributable to the parent and to the noncontrolling interest is presented in the consolidated statements of operations. Also, changes in ownership interests in consolidated companies in which the Company maintains a controlling interest are recorded in equity. Foreign Currency Translation and Transaction Gains and Losses The functional currency of the Company is the United States (“U.S.”) dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in the accompanying consolidated statements of operations and comprehensive earnings (loss) as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded foreign exchange losses of $ 3 million, $ 10 million, and none for the years ended December 31, 2015, 2014 and 2013, respectively, in other, net on our consolidated statements of operations. These amounts include gains and losses, realized and unrealized, on foreign currency forward contracts. Revenue Recognition Revenue is recognized from the sale of goods and advertising services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. Deferred revenue, which primarily relates to subscription-based and commission based arrangements, is recorded when payments are received in advance of TripAdvisor’s performance as required by the underlying agreements. Click-based Advertising —Revenue is derived primarily from click-through fees charged to TripAdvisor’s travel partners for traveler leads sent to the travel partners’ website. TripAdvisor records revenue from click-through fees after the traveler makes the click-through to the travel partners’ websites. Instant booking commission revenue is recorded at the time a traveler books a hotel transaction on TripAdvisor’s site where TripAdvisor does not assume cancellation risk. In transactions in which TripAdvisor assumes cancellation risk, it records revenue in the month in which the traveler’s stay at a hotel occurs. TripAdvisor has no post-booking service obligations for instant booking transactions. Display and Other Advertising —TripAdvisor recognizes display advertising revenue ratably over the advertising period or upon delivery of advertising impressions, depending on the terms of the advertising contract. Subscription-based revenue is recognized ratably over the related contractual period over which service is delivered. Attractions . TripAdvisor receives cash from the consumer at the time of booking of the destination activity and record these amounts, net of commissions, as deferred merchant payables on its consolidated balance sheets. Commission revenue is recorded as deferred revenue at the time of booking and later recognized when the consumer has completed the destination activity. TripAdvisor pays the destination activity operators after the travelers’ use. Restaurants - TripAdvisor recognizes reservation revenue (or per seated diner fees) on a transaction-by-transaction basis as diners are seated by its restaurant customers. Subscription-based revenue is recognized ratably over the related contractual period over which the service is delivered. Vacation Rentals - TripAdvisor generates revenue from customers for online advertising services related to the listing of their properties for rent primarily on either a subscription basis over a fixed-term, or on a commission basis for transactions that are booked on TripAdvisor’s platform. Payments for term-based subscriptions received in advance of services being rendered are recorded as deferred revenue and recognized ratably to revenue on a straight-line basis over the listing period. TripAdvisor’s commission revenue is primarily generated on its free-to-list option, in lieu of a pre-paid subscription fee. When a commissionable transaction is booked on TripAdvisor’s platform, it receives cash from the traveler that includes both commission, which is recorded as deferred revenue, and the amount due to the property owner, which is recorded to deferred merchant payables on TripAdvisor’s consolidated balance sheet. We pay the amount due to the property owner and recognize our commission revenue at the time of the traveler’s stay. Additional revenue is derived on a pay-per-lead basis, as we provide leads for rental properties to property managers. Pay-per-lead revenue is billed and recognized in the period when the leads are delivered to the property managers. Other Revenue – Retail revenue is recognized at the time of delivery to customers. An allowance for returned merchandise is provided as a percentage of sales based on historical experience. The total reduction in sales due to returns was approximately $ 3 million, $ 2 million, and $ 3 million for each of the years ended December 31, 2015, 2014 and 2013, respectively. Shipping revenue is included in net sales and the related costs of shipping are included in operating expense. Sales tax collected from customers on retail sales is recorded on a net basis and is not included in revenue. Operating Expense Operating expenses consist primarily of certain technology and content expenses, including personnel and overhead expenses which include salaries and benefits, stock-based compensation expense and bonuses for salaried employees and contractors engaged in the design, development, testing and maintenance of TripAdvisor’s website and mobile apps. Operating expense also includes to a lesser extent costs of services which are expenses that are closely correlated or directly related to service revenue generated, including advertising fees, flight search fees, credit card fees and data center costs. Other costs include licensing, maintenance expense, computer supplies, technology hardware, actual product cost, provision for obsolete inventory, buying allowances received from suppliers, shipping and handling costs and warehouse costs. General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including executive leadership, finance, legal and human resource functions and stock-based compensation expense as well as professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense and TripAdvisor’s charitable foundation costs. Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including search engine marketing, or SEM, and catalogue costs. In addition, our indirect sales and marketing expense consists of personnel and overhead expenses, including salaries, commissions, benefits, and bonuses for sales, sales support, customer support and marketing employees. The Company incurs advertising expense consisting of traffic generation costs from search engines and internet portals, other online and offline advertising expense, promotions and public relations to promote our brands. Costs associated with advertisements are expensed in the period in which the advertisement takes place. Advertising expense was $ 519 million, $ 357 million and $ 251 million for each of the years ended December 31, 2015 , 2014 and 2013 , respectively. Stock-Based Compensation As more fully described in note 9, Liberty has previously granted to its directors, employees and employees of its subsidiaries options, restricted stock and stock appreciation rights (“SARs”) to purchase shares of Liberty Interactive and/or Liberty Ventures common stock (collectively, “Awards”). Liberty measures the cost of employee services received in exchange for an Award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). Liberty measures the cost of employee services received in exchange for an Award of liability instruments (such as stock appreciation rights that will be settled in cash) based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Certain outstanding awards that were previously granted by Liberty were assumed by TripCo upon the completion of the Trip Spin-Off. Additionally, as of December 2012 TripAdvisor is a consolidated company and TripAdvisor has issued stock-based compensation to its employees related to their common stock. The consolidated statements of operations include stock-based compensation related to TripAdvisor equity in addition to Liberty Awards already held by BuySeasons employees. I ncluded in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2015, 2014 and 2013 (amounts in millions): December 31, 2015 2014 2013 Operating expense $ Selling, general and administrative $ Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not that such net deferred tax assets will not be realized. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is included in income tax expense in the accompanying consolidated statements of operations. Any accrual of penalties related to underpayment of income taxes on uncertain tax positions is included in income tax (expense) benefit in the accompanying consolidated statements of operations. We recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. In November 2015, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to simplify the presentation of deferred income taxes. The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet and permits the use of either a retrospective or prospective transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The Company has early adopted this guidance. The retrospective application of this guidance decreased current “Deferred income tax assets” by $ 11 million, decreased “Other assets” by $2 million and decreased “Deferred income tax liabilities” by $ 13 million on the consolidated balance sheets as of December 31, 2014. Deferred Merchant Payables TripAdvisor receives cash from travelers at the time of booking related to its vacation rental, attractions and transaction-based businesses and it records these amounts, net of commissions, on its consolidated balance sheets as deferred merchant payables. TripAdvisor pays the hotel, attraction provider or vacation rental owner after the travelers’ use and subsequent billing from the hotel, attraction pr ovider or vacation rental owner . Therefore, it receives cash from the traveler prior to paying the hotel, attraction provider or vacation rental owner , and this operating cycle represents a working capital source or use of cash to TripAdvisor. As long as these businesses grow, TripAdvisor expects that changes in working capital related to these transactions, depending on timing of payments and seasonality, will continue to impact operating cash flows. TripAdvisor’s deferred merchant payables balance was $ 105 million and $ 93 million for the years ended December 31, 2015 and 2014, respectively. Certain Risks and Concentrations The TripAdvisor business is subject to certain risks and concentrations including dependence on relationships with its customers. TripAdvisor is highly dependent on advertising relationships with Expedia and Priceline, which each accounted for more than 10% of TripAdvisor’s consolidated revenue and combined accounted for approximately 46 % , 46% and 47% of its total revenue for the years ended December 31, 2015, 2014 and 2013, respectively. Contingent Liabilities Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), cumulative foreign currency translation adjustments, and unrealized gains and losses on available-for-sale securities, net of tax. Earnings (Loss) per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. The Company issued 73,685,924 common shares, which is the aggregate number of shares of Series A and Series B common stock outstanding upon the completion of the Trip Spin-Off on August 27, 2014. The number of shares issued in the Trip Spin-Off is being used for both basic and diluted earnings per share for all periods prior to the date of the Trip Spin-Off as no Company equities or equity awards were outstanding prior to the Trip Spin-Off. Years ended December 31, 2015 2014 number of shares in millions Basic EPS Potentially dilutive shares — — Diluted EPS Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) recoverability and recognition of goodwill, intangible and long-lived assets, (ii) accounting for income taxes and (iii) stock-based compensation to be its most significant estimates. Reclassifications Certain prior period amounts have been reclassified for comparability with the current year presentation . Recently Adopted Accounting Pronouncements In April 2015, the FASB issued new accounting guidance which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. In August 2015, additional accounting guidance was issued on this topic that clarifies the April 2015 guidance for debt issuance costs associated with line-of-credit arrangements, which states the FASB would not object to the continued deferral and presentation of debt issuance costs as an asset, which would be subsequently amortized over the term of the arrangement. This guidance is effective for fiscal years, and the interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The Company has early adopted this guidance. The retrospective application of this guidance decreased “Other assets” and “Long-term debt” by $ 2 million on the consolidated balance sheet as of December 31, 2014. Refer to “Note 7— Debt” below for the current year presentation. New Accounting Pronouncements Not Yet Adopted In September 2015, the FASB issued new accounting guidance which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. This update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures . |
Supplemental Disclosures to Con
Supplemental Disclosures to Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | (3) Supplemental Disclosures to Consolidated Statements of Cash Flows Years ended December 31, 2015 2014 2013 amounts in millions Cash paid for acquisitions: Intangibles not subject to amortization $ Intangibles subject to amortization Fair value of other assets acquired Net liabilities assumed — Deferred tax assets (liabilities) Other — Cash paid for acquisitions, net of cash (acquired) $ Cash paid for interest $ Cash paid for income taxes $ |
TripAdvisor, Inc. Acquisitions
TripAdvisor, Inc. Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2015 | |
TripAdvisor, Inc. Acquisitions | |
TripAdvisor, Inc. Transactions | (4) TripAdvisor Acquisitions and Dispositions Acquisitions During the year ended December 31, 2015, TripAdvisor completed three acquisitions for a total purchase price consideration of $28 million and paid in cash. The total cash consideration is subject to adjustment based on the certain indemnification obligations for general representations and warranties of the acquired company stockholders. The cash consideration was paid primarily from TripAdvisor’s international subsidiaries. TripAdvisor acquired 100% of the outstanding capital stock of the following companies: ZeTrip, a personal journal app that helps users log activities, including places they have visited and photos they have taken, purchased in January 2015; BestTables, a provider of an online and mobile reservations platform for restaurants in Portugal and Brazil, purchased in March 2015; and Dimmi, a provider of an online and mobile reservations platform for restaurants in Australia, purchased in May 2015. The purchase price allocation for TripAdvisor’s 2015 acquisitions is preliminary and subject to revision as more information becomes available, but in any case will not be revised beyond twelve months after the acquisition date and any change to the fair value of assets acquired or liabilities assumed will lead to a corresponding adjustment through the consolidated statement of operations. The primary area of the purchase price allocation which is not yet finalized is related to income tax net operating losses for all 2015 acquisitions. Acquired goodwill related to our 2015 acquisitions is not deductible for tax purposes. Pro-forma results of operations for these acquisitions have not been presented as the financial impact to our consolidated financial statements, both individually and in aggregate, would not be materially different from historical results. T he following table presents the initial purchase price allocations recorded on our consolidated balance sheet for all 2015 acquisitions (in millions): Goodwill $ Intangible assets Net tangible assets Deferred tax liabilities, net Total purchase price consideration $ Intangible assets acquired during 2015 included trade names of $ 2 million, customer lists and supplier relationships of $ 7 million, and technology and other of $ 3 million. The overall weighted average life of the intangible assets acquired in the purchase of these businesses during 2015 was approximately 6 years, and will be amortized on a straight-line basis over their estimated useful lives. During the year ended December 31, 2014, TripAdvisor completed seven acquisitions for total cash consideration of $ 331 million, net of cash acquired. TripAdvisor acquired Vacation Home Rentals, a U.S.-based vacation rental website featuring properties around the world; London-based Tripbod, a travel community that helps connect travelers to local experts to deliver travelers relevant recommendations for trip planning; Lafourchette, a provider of an online and mobile reservations platform for restaurants in Europe; Viator a platform for researching and booking destination activities around the world; MyTable and Restopolis, a provider of an online and mobile reservations platform for restaurants in Italy; Iens, a provider of an online and mobile reservations platform for restaurants in the Netherlands. The following table presents the purchase price allocations recorded on our consolidated balance sheet for all 2014 acquisitions (in millions): Net assets (including acquired cash) $ Goodwill Intangible assets Deferred tax liabilities, net Accrued expenses and other liabilities Total purchase price consideration $ The excess purchase price over identifiable net tangible assets of $253 million has been recorded to goodwill in the accompanying consolidated balance sheet as of December 31, 2014. The goodwill in these transactions is primarily attributable to expected operational synergies, the assembled workforces, and the future development initiatives of the assembled workforces. Approximately $ 5 million of goodwill is expected to be deductible for tax purposes. A total of $194 million was allocated to identifiable intangible assets subject to amortization, including customer and supplier relationships, tradenames, subscription relationships, developed technology and other intangibles. The weighted-average life of the identifiable definite-lived intangible assets acquired in 2014 is approximately 7 years and will be amortized on a straight-line basis. Pro forma financial information related to these acquisitions has not been provided as they are not material to our consolidated results of operations. During the year ended December 31, 2013, TripAdvisor completed six acquisitions for total cash consideration of approximately $ 35 million, net of cash acquired. Approximately $1 million , $4 million, and $2 million of acquisition-related costs were expensed as incurred during the years ended December 31, 2015, 2014 and 2013, respectively, and are included in general and administrative expenses in the consolidated statements of operations. Dispositions In August 2015, TripAdvisor sold its 100% interest in a Chinese subsidiary to an unrelated third party for $ 28 million in cash consideration. Accordingly, TripAdvisor deconsolidated $ 11 million of assets (which included $ 3 million of cash sold) and $ 4 million of liabilities from its consolidated balance sheets and recognized a $ 20 million gain on sale in other, net on the consolidated statements of operations. |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
Assets and Liabilities Measured at Fair Value | |
Assets and Liabilities Measured at Fair Value | (5) Assets and Liabilities Measured at Fair Value 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 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or liabilities measured at fair value that would be considered Level 3. The Company’s assets and liabilities measured at fair value are as follows: December 31, 2015 December 31, 2014 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ — Marketable securities $ — — Available-for-sale securities $ — — The fair value of Level 2 marketable securities and available-for-sale securities were obtained from pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Other Financial Instruments Other financial instruments not measured at fair value on a recurring b asis include trade receivables , trade payables, accrued and other current liabilities. The carrying amount approximates fair value due to the short maturity of these instruments as reported on our consolidated balance sheets. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (6) Goodwill and Other Intangible Assets Goodwill and Indefinite Lived Intangible Assets Changes in the carrying amount of goodwill are as follows (amounts in millions): Corporate TripAdvisor and Other Total Balance at January 1, 2014 $ — Acquisition (1) — Other (2) — Balance at December 31, 2014 — Acquisition (1) — Other (2) — Balance at December 31, 2015 $ — (1) Additions to goodwill relate to TripAdvisor’s acquisitions. See “Note 4 – TripAdvisor, Inc. Acquisitions and Dispositions,” for further information. (2) Other changes are primarily due to foreign currency translation on goodwill. As presented in the accompanying consolidated balance sheets, trademarks are the other significant indefinite lived intangible asset and the change from the prior year is due to the change in foreign exchange rates. Intangible Assets subject to amortization Intangible assets subject to amortization are comprised of the following: December 31, 2015 December 31, 2014 Weighted Average Gross Net Gross Net Remaining carrying Accumulated carrying carrying Accumulated carrying Useful Life amount amortization amount amount amortization amount in years amounts in millions Customer relationships Other Total Amortization of TripAdvisor intangible assets acquired during 2012 are expected to match the usage of the related assets and are being amortized on an accelerated basis as reflected in amortization expense and in the future amortization table below. Amortization expense was $ 245 million, $ 279 million and $ 303 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2015 , assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions): 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ Impairments During the years ended December 31, 2015, 2014 and 2013, we recorded impairments related to BuySeasons, presented in the statements of operations, which is included in the Corporate and other segment. The impairments are primarily related to trademarks. Continued declining operating results as compared to budgeted results and certain trends required a quantitative impairment test and a determination of fair value for BuySeasons. This fair value, including the related intangibles and goodwill, was determined using projections of future operating performance and applying a combination of market multiples (market approach) and discounted cash flow (income approach) calculations (Level 3). As of December 31, 2015 the accumulated impairment losses for BuySeasons was $ 46 million. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt | |
Debt | (7) Debt Outstanding debt at December 31, 2015 and 2014 is summarized as follows: December 31, December 31, 2015 2014 amounts in millions TripAdvisor 2011 Credit Facility $ — TripAdvisor 2015 Credit Facility — TripCo margin loans Chinese credit facilities Unamortized discount and debt issuance costs Total consolidated TripCo debt $ Less debt classified as current Total long-term debt $ TripAdvisor 2011 Credit Facility In 2011, TripAdvisor entered into a credit agreement (the “2011 Credit Facility”), which provided $600 million of borrowing including: · a term loan facility in an aggregate principal amount of $ 400 million with a term of five years due December 2016 (“Term Loan”); and · a revolving credit facility in an aggregate principal amount of $ 200 million available in U.S. dollars, Euros and British pound sterling with a term of five years expiring December 2016. On June 26, 2015, the entire outstanding principal on TripAdvisor’s Term Loan in the amount of $ 290 million was repaid with borrowings from TripAdvisor’s 2015 Credit Facility (described below) and the 2011 Credit Facility was subsequently terminated. TripAdvisor repaid the Term Loan debt and terminated the 2011 Credit Facility without premium or penalty. There was no resulting loss on early extinguishment of this debt. TripAdvisor 2015 Credit Facility On June 26, 2015, TripAdvisor entered into a five year credit agreement (the “2015 Credit Facility”). The 2015 Credit Facility, among other things, provides for (i) a $1 billion unsecured revolving credit facility, (ii) an interest rate on borrowings and commitment fees based on TripAdvisor’s and its subsidiaries’ consolidated leverage ratio and (iii) uncommitted incremental revolving loan and term loan facilities, subject to compliance with a leverage covenant and other conditions. Any overdue amounts under or in respect of the revolving credit facility not paid when due shall bear interest at (i) in the case of principal, the applicable interest rate plus 2.00% per annum, (ii) in the case of interest denominated in British pound sterling or Euro, the applicable rate plus 2.00% per annum and (iii) in the case of interest denominated in U.S. Dollars, 2.00% per annum plus the Alternate Base Rate plus the interest rate spread applicable to ABR loans. TripAdvisor may borrow from the revolving credit facility in U.S. dollars, Euros and British pound sterling with a term of five years expiring June 26, 2020. TripAdvisor immediately borrowed $290 million from this revolving credit facility, which was used to repay all outstanding borrowings pursuant to the 2011 Credit Facility and is recorded in long term debt in the accompanying consolidated balance sheets as of December 31, 2015. There is no specific repayment date prior to the five-year maturity date for borrowings under this revolving credit facility. During the year ended December 31, 2015, TripAdvisor repaid $ 90 million of its outstanding borrowings on the 2015 Credit Facility. Based on TripAdvisor’s current leverage ratio, borrowings bear interest at LIBOR plus 125 basis points, or the Eurocurrency Spread. TripAdvisor is currently borrowing under a one-month interest period of 1.7% per annum, using a one-month interest period Eurocurrency Spread, which will reset periodically. Interest will be payable on a monthly basis while TripAdvisor is borrowing under the one-month interest rate period. TripAdvisor is also required to pay a quarterly commitment fee, on the average daily unused portion of the revolving credit facility for each fiscal quarter and fees in connection with the issuance of letters of credit. Unused revolver capacity is currently subject to a commitment fee of 20 basis points, given TripAdvisor’s current leverage ratio. The 2015 Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for borrowings on same-day notice. As of December 31, 2015, TripAdvisor had issued $ 2 million of outstanding letters of credit under the 2015 Credit Facility. In connection with the 2015 Credit Facility, TripAdvisor incurred lender fees and debt financing costs totaling $3 million, which were capitalized as deferred financing costs and recorded in other assets on the consolidated balance sheets. These costs will be amortized over the term of the 2015 Credit Facility using the effective interest rate method and will be recorded to interest expense in the consolidated statements of operations. TripAdvisor may voluntarily repay any outstanding borrowing under the 2015 Credit Facility at any time without premium or penalty, other than customary breakage costs with respect to Eurocurrency loans. Certain wholly-owned domestic subsidiaries of TripAdvisor have agreed to guarantee TripAdvisor’s obligations under the 2015 Credit Facility. The 2015 Credit Facility contains a number of covenants that, among other things, restrict TripAdvisor’s 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 the fiscal year. The 2015 Credit Facility also requires TripAdvisor to maintain a maximum leverage ratio and contains certain customary affirmative covenants and events of default, including a change of control. If an event of default occurs, the lenders under the 2015 Credit Facility will be entitled to take various actions, including the acceleration of all amounts due under the 2015 Credit Facility. TripAdvisor Chinese Credit Facilities In addition to borrowings under the 2015 Credit Facility, TripAdvisor maintains Chinese Credit Facilities. As of December 31, 2015 and 2014 , there were approximately $1 million and $38 million of short term borrowings outstanding, respectively. Tr ipAdvisor’s Chinese subsidiary entered into a $ 30 million , one year revolving credit facility with Bank of America (the “Chinese Credit Facility—BOA”) that is currently subject to review on a periodic basis with no specific expiration period. The Chinese Credit Facility—BOA bears interest at a rate based on 100% of the People’s Bank of China’s base rate, which was 4.35 % as of December 31, 2015 . During the year ended December 31, 2015, TripAdvisor made a $ 22 million repayment of its outstanding borrowings on the Chinese Credit Facility—BOA. As of December 31, 2015, TripAdvisor had $1 million of borrowings outstanding under the Chinese Credit Facility—BOA. In addition, Tr ipAdvisor’s Chinese subsidiary entered into a RMB 125,000,000 (approximately $20 million) one -year revolving credit facility with J.P. Morgan Chase Bank (“Chinese Credit Facility—JPM”). The Chinese Credit Facility—JPM bears interest at a rate based on 100% of the People’s Bank of China’s base rate, which was 4.35 % as of December 31, 2015 . During the year ended December 31, 2015, TripAdvisor made a $ 19 million repayment of its outstanding borrowings on the Chinese Credit Facility—JPM. As of December 31, 2015, there are no outstanding borrowings under the Chinese Credit Facility—JPM. TripCo Debt On August 21, 2014, a wholly owned subsidiary of TripCo (“TripSPV”), entered into two margin loan agreements which aggregated total borrowings of $400 million. Prior to the Trip Spin-Off, approximately $348 million of such amount was distributed to Liberty. Common Stock and Class B Common Stock of TripAdvisor were pledged as collateral pursuant to these agreements. Each agreement contains language that indicates that TripSPV, as borrower and transferor of underlying shares as collateral, has the right to exercise all voting, consensual and other powers of ownership pertaining to the transferred shares for all purposes, provided that TripCo agrees that it will not vote the shares in any manner that would reasonably be expected to give rise to transfer or certain other restrictions. Similarly, the loan agreements indicate that no lender party shall have any voting rights with respect to the shares transferred, except to the extent that a lender party buys any shares in a sale or other disposition made pursuant to the terms of the loan agreements. The agreements also contain certain restrictions related to additional indebtedness and margin calls. The initial margin call would require the outstanding balance to be reduced to $ 300 million if at any time the closing price per share of TripAdvisor common stock were to fall below certain minimum values. Interest on the margin loans accrues at a rate of 3.65% plus LIBOR for six months and 3.25% thereafter to be paid in kind or cash at the election of TripSPV. The Company expects that interest on the loan will be paid in kind and added to the principal amount on the loan. During the year ended December 31, 2015, TripCo recorded $ 17 million of non-cash interest related to the loan. The term of the loan is three years and the maturity date is August 22, 2017. As of December 31, 2015 , the values of TripAdvisor’s shares pledged as collateral pursuant to the margin loan agreements, determined based on the trading price of the Common Stock and on an as-if converted basis for the Class B Common Stock, are as follows: Number of Shares Pledged as Collateral as of Share value as of Pledged Collateral December 31, 2015 December 31, 2015 amounts in millions Common Stock $ Class B Common Stock $ The outstanding margin loans contain various affirmative and negative covenants that restrict the activities of the borrower. The loan agreements do not include any financial covenants. Additionally, in support of the margin loan agreements, TripCo and Liberty Interactive LLC entered into a promissory note whereby TripCo may request, upon certain margin call thresholds, up to $ 200 million in funds. Proceeds from the promissory note must be used by TripSPV to offset obligations under the margin loan agreements. Fair Value Due to the primarily variable rate nature, TripCo believes that the carrying amount of its debt approximated fair value at December 31, 2015 and 2014 . Debt Covenants As of December 31, 2015 , each of the Company and TripAdvisor was in compliance with its respective debt covenants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | (8) Income Taxes TripCo was included in the federal consolidated income tax return of Liberty prior to August 27, 2014. The tax provision included in these financial statements has been prepared on a stand-alone basis, as if TripCo was not part of the consolidated Liberty group. TripAdvisor, as a consolidated subsidiary for financial statement purposes, is not included in the Liberty consolidated group tax return and is not included in the TripCo consolidated group tax return subsequent to the Trip Spin-Off as TripCo owns less than 80% of TripAdvisor. Additionally, upon the completion of the Trip Spin-Off, the unused stand-alone net operating losses of BuySeasons was treated as a deemed equity distribution at that date. Furthermore, the income taxes payable allocated to TripCo by Liberty as of August 27, 2014 was treated as a deemed equity contribution of $29 million from Liberty upon completion of the Trip Spin-Off. Income tax benefit (expense) consists of: Years ended December 31, 2015 2014 2013 amounts in millions Current: Federal $ State and local Foreign $ Deferred: Federal $ State and local Foreign Income tax benefit (expense) $ The following table presents a summary of our domestic and foreign earnings from continuing operations before income taxes: Years ended December 31, 2015 2014 2013 amounts in millions Domestic $ Foreign Total $ Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following: Years ended December 31, 2015 2014 2013 amounts in millions Computed expected tax benefits (expense) $ State and local taxes, net of federal income taxes Foreign taxes, net of foreign tax credits Change in estimated tax rate Basis difference in consolidated subsidiary — Change in valuation allowance Change in unrecognized tax benefits Other Income tax (expense) benefit $ During 2015, the Company had income tax benefits from earnings in foreign jurisdictions taxed at rates lower than the 35% U.S. federal tax rate, partially offset by the recognition of deferred tax liabilities for basis differences in the stock of a consolidated subsidiary, changes in valuation allowance, and changes in unrecognized tax benefits. Included in the income tax benefits from earnings in foreign jurisdictions is a $ 13 million tax benefit recorded at TripAdvisor as a result of a favorable decision in a U.S tax court case issued in July 2015 related to the treatment of stock-based compensation in intercompany cost-sharing agreements. During 2014, the Company incurred aggregate income tax expense related to an increase in its estimate of the state effective tax rate used to measure its net deferred tax liabilities, based on a change to the Company’s estimated state apportionment factors and an increase in its unrecognized tax benefits. This income tax expense was partially offset with income tax benefits for earnings in foreign jurisdictions taxed at rates lower than the 35% U.S. federal tax rate. During 2013, the Company changed its estimate of the effective state tax rate used to measure its net deferred tax liabilities, based on expected changes to the Company’s state apportionment factors. The rate change required an adjustment to the recognized deferred taxes at the TripAdvisor level. The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are presented below: December 31, 2015 2014 amounts in millions Deferred tax assets: Loss carryforwards $ Stock-based compensation Other Total deferred tax assets Less: valuation allowance Net deferred tax assets Deferred tax liabilities: Intangible assets Investments Other Total deferred tax liabilities Net deferred tax liability $ During the year ended December 31, 2015, t he re was a $ 7 million increase in the Company’s valuation allowance that affected tax expense and a $ 7 million decrease in the valuation allowance due to the sale of a foreign subsidiary at TripAdvisor. TripAdvisor has not provided for deferred U.S. income taxes on undistributed earnings of certain foreign consolidated companies that it intends to reinvest permanently outside the United States; the total amount of such earnings as of December 31, 2015 was $759 million. Should these earnings be distributed or treated under certain U.S. tax rules as having distributed earnings of foreign consolidated companies in the form of dividends or otherwise, TripAdvisor may be subject to U.S. income taxes. Due to complexities in tax laws and various assumptions that would have to be made, it is not practicable at this time to estimate the amount of unrecognized deferred U.S. taxes on these earnings. At December 31, 2015, the Company has a deferred tax asset of $ 89 million for federal, state, and foreign loss carryforwards. Of this amount, $ 55 million is recorded at TripAdvisor. If not utilized to reduce income tax liabilities at TripAdvisor in future periods, these loss carryforwards will expire at various times between 2016 and 2035. The remaining deferred tax asset of $ 3 4 million relates to federal and state net operating loss carryforwards recorded at TripCo. If not utilized to reduce income tax liabilities at TripCo in future periods, these net operating loss carryforwards will expire at various times between 2021 and 2035. The loss carryforwards recorded at TripAdvisor and TripCo are expected to be utilized prior to expiration, except for $ 6 million of state net operating losses and $ 17 million of foreign net operating losses (on a tax-effected basis), which based on current projections of state and foreign taxable income may expire unused. As of December 31, 2015, 2014 and 2013 the Company had recorded tax reserves of $ 89 million, $ 67 million and $ 36 million, respectively, related to unrecognized tax benefits for uncertain tax positions, which is classified as long-term and included in other long-term liabilities on the consolidated balance sheets. Prior to the acquisition of a controlling interest in TripAdvisor in December 2012, the Company did not have any unrecognized tax benefits for uncertain tax positions. If the unrecognized tax benefits were to be recognized for financial statement purposes, approximately $ 53 million, $ 65 million and $ 19 million for the years ended December 31, 2015, 2014 and 2013, respectively, would be reflected in the Company’s tax expense and affect its effective tax rate. The Company’s estimate of its unrecognized tax benefits related to uncertain tax positions requires a high degree of judgment. The Company does not believe it is reasonably possible the gross unrecognized tax benefits may increase or be paid within the next twelve months. A reconciliation of unrecognized tax benefits is as follows (amounts in millions): Years ended December 31, 2015 2014 2013 Balance at beginning of year $ Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years — — Balance at end of year $ As of December 31, 2015, Liberty’s 2001 through 2011 tax years are closed for federal income tax purposes, and the IRS has completed its examination of Liberty’s 2012 and 2013 tax years. The tax loss carryforwards from the 2010 through 2012 tax years are still subject to adjustment. Liberty’s 2014 tax year is being examined currently as part of the IRS’s Compliance Assurance Process (“CAP”) program, and TripCo’s 2014 and 2015 tax years are also being examined currently as part of the CAP program. As discussed earlier, because TripCo’s ownership of TripAdvisor is less than the required 80% , TripAdvisor does not consolidate with TripCo for federal income tax purposes. Prior to December 2011, Trip Advisor was included in the consolidated federal income tax returns filed by Expedia. Expedia’s 2009 and 2010 tax years are currently being audited by the IRS. TripAdvisor and Expedia are parties to a tax sharing agreement whereby TripAdvisor is generally required to indemnify Expedia for any taxes resulting from the Expedia spin-off (and any related interest, penalties, legal and professional fees, and all costs and damages associated with related stockholder litigation or controversies) to the extent such amounts resulted from (i) any act or failure to act by TripAdvisor described in the covenants in the tax sharing agreement, (ii) any acquisition of TripAdvisor’s equity securities or assets or those of a member of its group, or (iii) any failure of the representations with respect to TripAdvisor or any member of its group to be true or any breach by TripAdvisor or any member of its group of any covenant, in each case, which is contained in the separation documents or in the documents relating to the IRS private letter ruling and/or the opinion of counsel. TripAdvisor is undergoing an audit by the IRS for the 2012 and 2013 tax year s . Various sta tes are currently examining TripAdvisor’s prior year’s state income tax returns. TripAdvisor is no longer subject to tax examinations by tax authorities for years prior to 2007. As of December 31, 2015, no material assessments have resulted. As of December 31, 2015 and 2014 , the Company had recorded approximately $ 6 million and $4 million, respectively, of accrued interest and penalties related to uncertain tax positions. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock Based Compensation | |
Stock Based Compensation | (9) Stock-Based Compensation TripCo Incentive Plans In connection with the Trip Spin-Off , the holder of an outstanding option or stock appreciation right (collectively “Award”) to purchase shares of Liberty Ventures Series A and Series B common stock on the record date (a “Liberty Ventures Award”) received an Award to purchase shares of the corresponding series of TripCo common stock and an adjustment to the exercise price and number of shares subject to the original Liberty Ventures Award (as so adjusted, an “adjusted Liberty Ventures Award”). Following the Trip Spin-Off, employees of Liberty hold Awards in both Liberty Ventures common stock and TripCo common stock. The compensation expense relating to employees of Liberty is recorded at Liberty. Therefore, compensation expense related to Awards resulting from the Trip Spin-Off will not be recognized in the Company’s consolidated financial statements. Except as described above, all other terms of an adjusted Liberty Ventures Award and a new TripCo Award (including, for example, the vesting terms thereof) are in all material respects, the same as those of the corresponding original Liberty Ventures Award. Pursuant to the Liberty TripAdvisor Holdings, Inc. 2014 Omnibus Incentive Plan (Amended and Restated as of March 11, 2015) (the “2014 Plan”), the Company may grant Awards in respect of a maximum of 6.7 million shares of TripCo common stock. Awards generally vest over 4 - 5 years and have a term of 7 - 10 years. TripCo issues new shares upon exercise of equity awards. TripCo - Grants During the year ended December 31, 2015 and pursuant to the 2014 Plan, TripCo granted 25 thousand options to purchase shares of Series A common stock to its non-employee directors. Such options had a weighted average grant-date fair value of $ 12.66 per share and cliff vest over a 1 -year vesting period. There were no options to purchase shares of Series B common stock granted during the period. The Company has calculated the grant-date fair value for all of its equity classified awards and any subsequent remeasurement of its liability classified awards using the Black-Scholes -Merton Model. The Company estimates the expected term of the Awards based on historical exercise and forfeitur e data. For grants made in 2014 and 2015 , the range of expected terms was 6 yea rs to 7 years. Since TripCo common stock has not traded on the stock market for a significant length of time, the volatility used in the calculation for Awards is based on a blend of the historical volatility of TripCo and TripAdvisor common stock and the implied volatility of publicly traded TripCo and TripAdvisor options; as the most significant asset within TripCo, the volatility of TripAdvisor was considered in the overall volatility of TripCo. For grants made in 2014 and 2015 , the range of volatilities was 40.8% to 45.9% . The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. The Company recognizes the cost of an Award over the period during which the employee is required to provide service (usually the vesting period of the Award). TripCo - Outstanding Awards The following table presents the number and weighted average exercise price (“WAEP”) of Awards to purchase TripCo common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards. Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value in thousands in years in millions Outstanding at January 1, 2015 $ Granted $ Exercised $ Forfeited/Cancelled $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ Weighted average remaining Aggregate contractual intrinsic Series B WAEP life value in thousands in years (in millions) Outstanding at January 1, 2015 $ Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 — $ — — $ — As of December 31, 2015 , the total unrecognized compensation cost related to unvested equity Awards was $20 million. Such amount will be recognized in the Company’s statements of operations over a weighted average period of approximately 2.4 years. TripCo - Exercises The aggregate intrinsic value of all TripCo options exercised during the year s ended December 31, 2015 and 2014 was $ 7.3 million and $10.7 million , respectively . The aggregate intrinsic value of all Liberty options, related to BuySeasons emplo yees, exercised during the year ended December 31, 2013 was $1.6 million . TripCo — Restricted Stock The aggregate fair value of all restricted shares of TripCo common stock and Liberty common stock that vested during the years ended December 31, 2015, 2014 and 2013, respectively, was less than a million. TripAdvisor Equity Grant Awards Pursuant to TripAdvisor ’s 2011 Stock and Annual Incentive Plan (the “2011 Incentive Plan”), TripAdvisor may grant restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards to TripAdvisor directors, officers, employees and consultants. Grants were valued using a volatility of 41.8% and the applicable risk free rate for an expected term of 5.4 years for the year ended December 31, 2015, volatility of 44.0% and the applicable risk free rate for an expected term of 5.8 years for the year ended December 31, 2014, and a volatility of 50.8% and the applicable risk free interest rate for an expected term of 6.1 years for the year ended December 31, 2013. Performance-based stock options and RSUs vest upon achievement of certain TripAdvisor company-based performance conditions and a requisite service period. On the date of grant, the fair value of stock options is calculated using a Black-Scholes -Merton model, which incorporates assumptions to value stock-based awards, including the risk-free rate of return, expected volatility, expected term and expected dividend yield. If, upon grant, TripAdvisor assesses the achievement of performance targets as probable, compensation expense is recorded for the awards over the estimated performance period on a straight-line basis. At each reporting period, the probability of achieving the performance targets and the performance period required to meet those targets is assessed. To the extent actual results or updated estimates differ from TripAdvisor’s estimates, the cumulative effect on current and prior periods of those changes will be recorded in the period estimates are revised, or the change in estimate will be applied prospectively depending on whether the change affects the estimate of total compensation cost to be recognized or merely affects the period over which compensation cost is to be recognized. The following table presents the number, weighted average exercise price (“WAEP”) and aggregate intrinsic value of stock options to purchase TripAdvisor common stock granted under their 2011 Incentive Plan: Weighted Average Remaining Aggregate Number of Contractual Intrinsic Options WAEP Life Value (in thousands) (in years) (in millions) Outstanding at January 1, 2015 $ Granted $ Exercised $ Cancelled or expired $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ During the year ended December 31, 2015, Trip Advisor granted 0.6 million of service based stock options u nder their 2011 Incentive Plan , with a weighted average estimated grant-date fair value per option of $ 33.02 . These stock options generally have a contractual term of ten years from the date of grant and generally vest over a four year requisite service period. As of December 31, 2015 , the total number of shares available under the 2011 Incentive Plan is 17,200,758 shares. TripAdvisor related stock-based compensation for the year ended December 31, 2015 was approximately $ 77 million. As of December 31, 2015 , the total unrecognized compensation cost related to unvested TripAdvisor stock options was approximately $ 56 million and will be recognized over a weighted average period of approximately 2.5 years. Restricted Stock Units RSUs are stock awards that are granted to employees entitling the holder to shares of TripAdvisor common stock as the award vests. RSUs are measured at fair value based on the number of shares granted and the quoted price of TripAdvisor common stock at the date of grant. The fair value of RSUs, net of estimated forf eitures, is amortized as stock- based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. During the year ended December 31, 2015, TripAdvisor granted 1 million service based RSUs under their 2011 Incentive Plan for which the fair value was measured based on the quoted price of TripAdvisor common stock at the date of grant. The weighted average grant date fair va lue for RSUs granted during 2015 was $ 82.95 per share. The unvested TripAdvisor RSUs had a weighted a verage grant date fair value of $ 79.02 as of December 31, 2015 . As of December 31, 2015 , the total unrecognized compensation cost related to 1.8 million unvested TripAdvisor RSU’s outstanding was approximately $94 million which will be recognized over the remaining vesting term of approximately 2.7 years. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit Plans | |
Employee Benefit Plans | (10) Employee Benefit Plans Consolidated companies of TripCo sponsor 401(k) plans, which provide their employees an opportunity to make contributions to a trust for investment in TripCo common stock, as well as other mutual funds. The Company’s consolidated companies make matching contributions to the plans based on a percentage of the amount contributed by employees. Employer cash contributions related to BuySeasons and TripAdvisor were $ 7 million, $5 million and $5 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | (11) Related Party Transactions Agreement with Chairman, President and CEO Because of the significant voting power that Mr. Maffei would possess upon exercise of the options granted to him on December 21, 2014 and as a result of the share exchange between Mr. Maffei and certain of our stockholders in December 2014, the Compensation Committee of the Board and members of the Board independent of Mr. Maffei determined it was appropriate to request that Mr. Maffei and TripCo enter into a standstill agreement that would cap his voting interest at 34.9% (the “Standstill Agreement”), subject to a variety of limitations and exceptions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | (12) Commitments and Contingencies Operating Leases TripCo’s consolidated companies have contractual obligations in the form of operating leases for office and warehouse space for which the related expense is recorded on a monthly basis. Certain leases contain periodic rent escalation adjustments and renewal options. Rent expense related to such leases is recorded on a straight-line basis. Operating lease obligations expire at various dates with the latest maturity in December 20 30 . In June 2013, TripAdvisor entered into a lease to move its headquarters to Needham, Massachusetts in 2015. TripAdvisor was the deemed owner (for accounting purposes only) of the new building during the construction period under build to suit lease accounting. As building construction began in the fourth quarter of 2013, TripAdvisor recorded project construction cost s incurred by the landlord as a construction-in-progress asset and a corresponding construction financing obligation in “Property and equipment, at cost” and “Other liabilities,” respectively, in the consolidated balance sheets. Upon completion of construction at the end of the second quarter of 2015, TripAdvisor evaluated the construction-in-progress asset and construction financing obligation for de-recognition under the criteria for “sale-leaseback” treatment under GAAP. TripAdvisor has continued economic involvement in the facility, and therefore did not meet the provisions for sale-leaseback accounting. This determination was based on TripAdvisor's continuing involvement with the property in the form of non-recourse financing to the lessor. Therefore, the lease has been accounted for as a financing obligation. Accordingly, TripAdvisor began depreciating the building asset over its estimated useful life and incurring interest expense related to the financing obligation imputed using the effective interest rate method. TripAdvisor will bifurcate the lease payments into (i) a portion that is allocated to the building (a reduction to the construction financing obligation) and; (ii) a portion that is allocated to the land on which the building was constructed. The portion of the lease payments allocated to the land is treated as an operating lease that commenced in 2013. The construction financing obligation is considered a long-term finance lease obligation and is recorded to noncurrent “Other liabilities” in the consolidated balance sheets. At the end of the lease term, the carrying value of the building asset and of the remaining financing obligation are expected to be equal, at which time TripAdvisor may either surrender the leased asset as settlement of the remaining financing obligation or extend the initial term of the lease for the continued use of the asset. The lease payments under the new lease will approximate $9.5 million annually. TripAdvisor incurred approximately $ 6 million, $ 62 million and $8 million of non-cash construction costs and related obligations in connection with the capitalization of construction-in-progress and tenant improvement costs during the years ended December 31, 2015, 2014 and 2013, respectively. TripAdvisor also leases an aggregate of approximately 410,000 square feet at approximately 40 other locations across North America, Europe and Asia Pacific, primarily for its international management teams, sales offices, and subsidiary headquarters, pursuant to leases with expirat ion dates through June 2027. For the years ended December 31, 2015 , 2014 and 2013 , TripCo recorded rental expense of $ 22 million, $ 22 million and $ 15 million, respectively. The following table presents TripCo’s estimated future minimum rental payments under operating leases with non-cancelable lease terms, including the new TripAdvisor headquarters lease, that expire after December 31, 2015 (amounts in millions): 2016 $ 2017 2018 2019 2020 Thereafter $ Charitable Fou ndation TripAdvisor has historically funded 2% of its annual operating income before amortization and stock-based compensation to The TripAdvisor Foundation (“the Foundation”). TripAdvisor’s pledge agreement provided for an immediate satisfaction of all future annual contributions, by paying an amount of eight multiplied by TripAdvisor’s prior year contribution to the Foundation. TripAdvisor exercised this right under the pledge agreement in December 2015. Consequently, TripAdvisor recorded an expense for the year ending December 31, 2015 in the amount of $ 67 million for the contribution, which was recorded to general and administrative expense in the consolidated statements of operations. TripAdvisor settled this obligation with treasury shares based on the fair value of its common stock on the date the treasury shares were issued to the Foundation. Due to the one-time nature and use of stock to settle the obligation, the amount has been excluded from Adjusted OIBDA for the year ended December 31, 2015, as shown in note 13. TripAdvisor does not expect to make any future contributions to the Foundation. The Board of Directors of the Foundation is comprised of Stephen Kaufer- TripAdvisor President and Chief Executive Officer, Julie M.B. Bradley- former TripAdvisor Chief Financial Officer and Seth J. Kalvert- TripAdvisor Senior Vice President, General Counsel and Secretary. Off- Balance Sheet Arrangements TripCo did not have any other off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources. Litigation In the ordinary course of business, the Company and its subsidiaries are parties to legal proceedings and claims involving, among other things, arising out of our operations. These matters may relate to claims involving alleged infringement of third-party intellectual property rights, defamation, taxes, regulatory compliance and other claims. Although it is reasonably possible that the Company may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying consolidated financial statements. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Segment Information | (13) Segment Information TripCo, through its ownership interests in subsidiaries and other companies, is primarily engaged in the on-line commerce industries. TripCo identifies its reportable segments as (A) those consolidated companies that represent 10% or more of its consolidated annual revenue, annual adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of TripCo’s annual pre-tax earnings. TripCo evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, TripCo reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate. TripCo defines Adjusted OIBDA as revenue less operating expenses, and selling, general and administrative expenses (excluding stock-based compensation) , adjusted for specifically identified non-recurring transactions . TripCo believes this measure is an important indicator of the operational strength and performance of its businesses, including each business’s ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, equity settled liabilities (including stock-based compensation ) , separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. TripCo generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices. TripCo’s operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated companies are the same as those described in the Company’s summary of significant accounting policies. Performance Measures Years ended December 31, 2015 2014 2013 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions TripAdvisor $ Corporate and other Consolidated TripCo $ Other Information December 31, 2015 December 31, 2014 Total Capital Total Capital Assets expenditures Assets expenditures amounts in millions TripAdvisor $ Corporate and other Consolidated TripCo $ Revenue by Geographic Area December 31, 2015 2014 2013 amounts in millions United States $ United Kingdom Other countries Consolidated TripCo $ Long-lived Assets by Geographic Area December 31, 2015 2014 amounts in millions United States $ Other countries Consolidated TripCo $ The following table provides a reconciliation of consolidated Adjusted OIBDA to earnings (loss) before income taxes: Years ended December 31, 2015 2014 2013 amounts in millions Consolidated Adjusted OIBDA $ Stock settled charitable contribution — — Stock-based compensation Depreciation and amortization Impairment of intangible assets Interest expense Other, net Earnings (loss) before income taxes $ |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (Unaudited) | |
Quarterly Financial Information (Unaudited) | (14) Quarterly Financial Information (Unaudited) 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2015: Revenue $ Operating income (loss) $ Net earnings (loss) $ Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B Stockholders per common share $ 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2014: Revenue $ Operating income (loss) $ Net earnings (loss) $ Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B Stockholders per common share $ |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of cash deposits held in global financial institutions. Cash equivalents consist of highly liquid investments with maturities of three months or less at the time of acquisition. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are generally due within 30 days and are recorded net of an allowance for doubtful accounts. Such allowance aggregated $ 6 million and $ 7 million at December 31, 2015 and 2014 , respectively. For accounts outstanding longer than the contractual payment terms, the Company determines an allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, a specific customer’s ability to pay its obligations to us, and the condition of the general economy and industry as a whole. |
Inventory | Inventory Inventory, which consists of party and costume merchandise held for sale, is stated at the lower of cost or market, determined on a first-in, first-out method. Inventory is stated net of valuation adjustments and inventory obsolescence reserves, equal to the difference between the cost of inventory and the estimated market value, of approximately $ 3 million as of December 31, 2015 and 2014 The Company recorded $ 3 million and $ 3 million reductions in the value of its inventory during the years ended December 31, 2015 and 2014 due to the amount of aged inventory on-hand. These charges are included in operating expenses in the statements of operations. Additionally, the Company sold approximately $ 1 million and $4 million of previously reserved inventory during 2015 and 2014, respectively. |
Investments | Investments All marketable debt and equity securities held by the Company are classified as available-for-sale (“AFS”) and are carried at fair value generally based on quoted market prices. Fair values are determined for each individual security in the investment portfolio. Unrealized gains and losses, net of taxes, arising from changes in fair value are reported in accumulated other comprehensive income (loss) as a component of equity. The classification of investments is determined at the time of purchase and reevaluated at each balance sheet date. We invest in highly-rated securities, and our investment policy limits the amount of credit exposure to any one issuer, industry group and currency. The policy requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and providing liquidity of investments sufficient to meet our operating and capital spending requirements and debt repayments. Marketable debt securities are classified as either short-term or long-term based on each instrument’s underlying contractual maturity date and as to whether and when we intend to sell a particular security prior to its maturity date. Marketable debt securities with maturities greater than 90 days at the date of purchase and 12 months or less remaining at the balance sheet date will be classified as short-term and marketable debt securities with maturities greater than 12 months from the balance sheet date will generally be classified as long-term. We classify our marketable equity securities, limited to money market funds and mutual funds, as either short-term or long-term based on the nature of each security and its availability for use in current operations. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, anticipation of credit deterioration and liquidity and duration management. The weighted average maturity of our total invested cash shall not exceed 18 months, and no security shall have a final maturity date greater than three years. |
Property and Equipment | Property and Equipment Property and equipment consists of the following (amounts in millions): December 31, 2015 2014 Building $ — Leasehold improvements Computer equipment Furniture, office equipment and other Construction in progress — Total property and equipment $ Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment and furniture, office equipment and other. Leasehold improvements are depreciated using the straight-line method, over the shorter of the estimated useful life of the improvement or the remaining term of the lease. TripAdvisor’s building, which is considered an asset for accounting purposes, is depreciated over its estimated useful life of 40 years. Construction-in-progress costs were primarily related to TripAdvisor’s build-to-suit lease obligation during the year ended December 31, 2014, as discussed in note 12. |
Leases | Leases The Company, through its consolidated companies, leases facilities in several countries around the world and certain equipment under non-cancelable lease agreements. The terms of some of the lease agreements provide for rental payments on a graduated basis. Rent expense is recognized on a straight-line basis over the lease period and accrued as rent expense incurred but not paid. Any lease incentives are recognized as reductions of rental expense on a straight-line basis over the term of the lease. The lease term begins on the date we become legally obligated for the rent payments or when we take possession of the office space, whichever is earlier. We establish assets and liabilities for the estimated construction costs incurred under lease arrangements where we are considered the owner for accounting purposes only, or build-to-suit leases, to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If we continue to be the deemed owner, the facilities are accounted for as financing leases. |
Intangible Assets | Intangible Assets Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment upon certain triggering events. Goodwill and other intangible assets with indefinite useful lives (collectively, "indefinite lived intangible assets") are not amortized, but instead are tested for impairment at least annually. Our annual impairment assessment of our indefinite-lived intangible assets is performed during the fourth quarter of each year. The Company utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In evaluating goodwill on a qualitative basis the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current and prior years for other purposes. If a step one test is considered necessary based on the qualitative factors, the Company compares the estimated fair value of a reporting unit to its carrying value. Developing estimates of fair value requires significant judgments, including making assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading prices and the amount and timing of expected future cash flows. The cash flows employed in Liberty's valuation analysis are based on management's best estimates considering current marketplace factors and risks as well as assumptions of growth rates in future years. There is no assurance that actual results in the future will approximate these forecasts. For those reporting units whose carrying value exceeds the fair value, a second test is required to measure the impairment loss (the "Step 2 Test"). In the Step 2 Test, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit with any residual value being allocated to goodwill. The difference between such allocated amount and the carrying value of the goodwill is recorded as an impairment charge. The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If the qualitative assessment supports that it is more likely than not that the carrying value of the Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. See note 6 for discussion of goodwill impairment s. |
Websites and Internal Use Software Development Costs | Websites and Internal Use Software Development Costs Certain costs incurred during the application development stage related to the development of websites and internal use software are capitalized and included in other intangibles. Capitalized costs include internal and external costs, if direct and incremental, and deemed by management to be significant. Costs related to the planning and post-implementation phases of software and website development are expensed as these costs are incurred. Maintenance and enhancement costs (including those costs in the post-implementation stages) are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software resulting in added functionality, in which case the costs are capitalized. |
Impairment of Long‑Lived Assets | Impairment of Long-lived Assets The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets (other than goodwill and indefinite-lived intangibles) to determine whether current events or circumstances indicate that such carrying amounts may not be recoverable. If the carrying amount of the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is to be recognized. Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair value. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows using an appropriate discount rate. Considerable management judgment is necessary to estimate the fair value of asset groups. Accordingly, actual results could vary significantly from such estimates. Asset groups to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interest relates to the equity ownership interest in TripAdvisor that the Company does not own. The Company reports noncontrolling interests of consolidated companies within equity in the consolidated balance sheets and the amount of net income attributable to the parent and to the noncontrolling interest is presented in the consolidated statements of operations. Also, changes in ownership interests in consolidated companies in which the Company maintains a controlling interest are recorded in equity. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses The functional currency of the Company is the United States (“U.S.”) dollar. The functional currency of the Company’s foreign operations generally is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and the consolidated statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is recorded as a component of accumulated other comprehensive earnings (loss) in equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses which are reflected in the accompanying consolidated statements of operations and comprehensive earnings (loss) as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions. Accordingly, we have recorded foreign exchange losses of $ 3 million, $ 10 million, and none for the years ended December 31, 2015, 2014 and 2013, respectively, in other, net on our consolidated statements of operations. These amounts include gains and losses, realized and unrealized, on foreign currency forward contracts. |
Revenue Recognition | Revenue Recognition Revenue is recognized from the sale of goods and advertising services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. Deferred revenue, which primarily relates to subscription-based and commission based arrangements, is recorded when payments are received in advance of TripAdvisor’s performance as required by the underlying agreements. Click-based Advertising —Revenue is derived primarily from click-through fees charged to TripAdvisor’s travel partners for traveler leads sent to the travel partners’ website. TripAdvisor records revenue from click-through fees after the traveler makes the click-through to the travel partners’ websites. Instant booking commission revenue is recorded at the time a traveler books a hotel transaction on TripAdvisor’s site where TripAdvisor does not assume cancellation risk. In transactions in which TripAdvisor assumes cancellation risk, it records revenue in the month in which the traveler’s stay at a hotel occurs. TripAdvisor has no post-booking service obligations for instant booking transactions. Display and Other Advertising —TripAdvisor recognizes display advertising revenue ratably over the advertising period or upon delivery of advertising impressions, depending on the terms of the advertising contract. Subscription-based revenue is recognized ratably over the related contractual period over which service is delivered. Attractions . TripAdvisor receives cash from the consumer at the time of booking of the destination activity and record these amounts, net of commissions, as deferred merchant payables on its consolidated balance sheets. Commission revenue is recorded as deferred revenue at the time of booking and later recognized when the consumer has completed the destination activity. TripAdvisor pays the destination activity operators after the travelers’ use. Restaurants - TripAdvisor recognizes reservation revenue (or per seated diner fees) on a transaction-by-transaction basis as diners are seated by its restaurant customers. Subscription-based revenue is recognized ratably over the related contractual period over which the service is delivered. Vacation Rentals - TripAdvisor generates revenue from customers for online advertising services related to the listing of their properties for rent primarily on either a subscription basis over a fixed-term, or on a commission basis for transactions that are booked on TripAdvisor’s platform. Payments for term-based subscriptions received in advance of services being rendered are recorded as deferred revenue and recognized ratably to revenue on a straight-line basis over the listing period. TripAdvisor’s commission revenue is primarily generated on its free-to-list option, in lieu of a pre-paid subscription fee. When a commissionable transaction is booked on TripAdvisor’s platform, it receives cash from the traveler that includes both commission, which is recorded as deferred revenue, and the amount due to the property owner, which is recorded to deferred merchant payables on TripAdvisor’s consolidated balance sheet. We pay the amount due to the property owner and recognize our commission revenue at the time of the traveler’s stay. Additional revenue is derived on a pay-per-lead basis, as we provide leads for rental properties to property managers. Pay-per-lead revenue is billed and recognized in the period when the leads are delivered to the property managers. Other Revenue – Retail revenue is recognized at the time of delivery to customers. An allowance for returned merchandise is provided as a percentage of sales based on historical experience. The total reduction in sales due to returns was approximately $ 3 million, $ 2 million, and $ 3 million for each of the years ended December 31, 2015, 2014 and 2013, respectively. Shipping revenue is included in net sales and the related costs of shipping are included in operating expense. Sales tax collected from customers on retail sales is recorded on a net basis and is not included in revenue. |
Operating Expense | Operating Expense Operating expenses consist primarily of certain technology and content expenses, including personnel and overhead expenses which include salaries and benefits, stock-based compensation expense and bonuses for salaried employees and contractors engaged in the design, development, testing and maintenance of TripAdvisor’s website and mobile apps. Operating expense also includes to a lesser extent costs of services which are expenses that are closely correlated or directly related to service revenue generated, including advertising fees, flight search fees, credit card fees and data center costs. Other costs include licensing, maintenance expense, computer supplies, technology hardware, actual product cost, provision for obsolete inventory, buying allowances received from suppliers, shipping and handling costs and warehouse costs. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of personnel and related overhead costs, including executive leadership, finance, legal and human resource functions and stock-based compensation expense as well as professional service fees and other fees including audit, legal, tax and accounting, and other costs including bad debt expense and TripAdvisor’s charitable foundation costs. |
Selling and Marketing | Selling and Marketing Selling and marketing expenses primarily consist of direct costs, including search engine marketing, or SEM, and catalogue costs. In addition, our indirect sales and marketing expense consists of personnel and overhead expenses, including salaries, commissions, benefits, and bonuses for sales, sales support, customer support and marketing employees. The Company incurs advertising expense consisting of traffic generation costs from search engines and internet portals, other online and offline advertising expense, promotions and public relations to promote our brands. Costs associated with advertisements are expensed in the period in which the advertisement takes place. Advertising expense was $ 519 million, $ 357 million and $ 251 million for each of the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Stock‑Based Compensation | Stock-Based Compensation As more fully described in note 9, Liberty has previously granted to its directors, employees and employees of its subsidiaries options, restricted stock and stock appreciation rights (“SARs”) to purchase shares of Liberty Interactive and/or Liberty Ventures common stock (collectively, “Awards”). Liberty measures the cost of employee services received in exchange for an Award of equity instruments (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). Liberty measures the cost of employee services received in exchange for an Award of liability instruments (such as stock appreciation rights that will be settled in cash) based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Certain outstanding awards that were previously granted by Liberty were assumed by TripCo upon the completion of the Trip Spin-Off. Additionally, as of December 2012 TripAdvisor is a consolidated company and TripAdvisor has issued stock-based compensation to its employees related to their common stock. The consolidated statements of operations include stock-based compensation related to TripAdvisor equity in addition to Liberty Awards already held by BuySeasons employees. I ncluded in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2015, 2014 and 2013 (amounts in millions): December 31, 2015 2014 2013 Operating expense $ Selling, general and administrative $ |
Income taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax bases of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not that such net deferred tax assets will not be realized. We consider all relevant factors when assessing the likelihood of future realization of our deferred tax assets, including our recent earnings experience by jurisdiction, expectations of future taxable income, and the carryforward periods available to us for tax reporting purposes, as well as assessing available tax planning strategies. The effect on deferred tax assets and liabilities of an enacted change in tax rates is recognized in income in the period that includes the enactment date. Due to inherent complexities arising from the nature of our businesses, future changes in income tax law, tax sharing agreements or variances between our actual and anticipated operating results, we make certain judgments and estimates. Therefore, actual income taxes could materially vary from these estimates. When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is included in income tax expense in the accompanying consolidated statements of operations. Any accrual of penalties related to underpayment of income taxes on uncertain tax positions is included in income tax (expense) benefit in the accompanying consolidated statements of operations. We recognize in our consolidated financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. In November 2015, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance to simplify the presentation of deferred income taxes. The new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet and permits the use of either a retrospective or prospective transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The Company has early adopted this guidance. The retrospective application of this guidance decreased current “Deferred income tax assets” by $ 11 million, decreased “Other assets” by $2 million and decreased “Deferred income tax liabilities” by $ 13 million on the consolidated balance sheets as of December 31, 2014. |
Deferred Merchant Payables | Deferred Merchant Payables TripAdvisor receives cash from travelers at the time of booking related to its vacation rental, attractions and transaction-based businesses and it records these amounts, net of commissions, on its consolidated balance sheets as deferred merchant payables. TripAdvisor pays the hotel, attraction provider or vacation rental owner after the travelers’ use and subsequent billing from the hotel, attraction pr ovider or vacation rental owner . Therefore, it receives cash from the traveler prior to paying the hotel, attraction provider or vacation rental owner , and this operating cycle represents a working capital source or use of cash to TripAdvisor. As long as these businesses grow, TripAdvisor expects that changes in working capital related to these transactions, depending on timing of payments and seasonality, will continue to impact operating cash flows. TripAdvisor’s deferred merchant payables balance was $ 105 million and $ 93 million for the years ended December 31, 2015 and 2014, respectively. |
Certain Risks and Concentrations | Certain Risks and Concentrations The TripAdvisor business is subject to certain risks and concentrations including dependence on relationships with its customers. TripAdvisor is highly dependent on advertising relationships with Expedia and Priceline, which each accounted for more than 10% of TripAdvisor’s consolidated revenue and combined accounted for approximately 46 % , 46% and 47% of its total revenue for the years ended December 31, 2015, 2014 and 2013, respectively. |
Contingent Liabilities | Contingent Liabilities Periodically, we review the status of all significant outstanding matters to assess any potential financial exposure. When (i) it is probable that an asset has been impaired or a liability has been incurred and (ii) the amount of the loss can be reasonably estimated, we record the estimated loss in our consolidated statements of operations. We provide disclosure in the notes to the consolidated financial statements for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred that would be material to the financial statements. Significant judgment is required to determine the probability that a liability has been incurred and whether such liability is reasonably estimable. We base accruals made on the best information available at the time which can be highly subjective. The final outcome of these matters could vary significantly from the amounts included in the accompanying consolidated financial statements. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss), cumulative foreign currency translation adjustments, and unrealized gains and losses on available-for-sale securities, net of tax. |
Earnings per Share (EPS) | Earnings (Loss) per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. The Company issued 73,685,924 common shares, which is the aggregate number of shares of Series A and Series B common stock outstanding upon the completion of the Trip Spin-Off on August 27, 2014. The number of shares issued in the Trip Spin-Off is being used for both basic and diluted earnings per share for all periods prior to the date of the Trip Spin-Off as no Company equities or equity awards were outstanding prior to the Trip Spin-Off. Years ended December 31, 2015 2014 number of shares in millions Basic EPS Potentially dilutive shares — — Diluted EPS |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i) recoverability and recognition of goodwill, intangible and long-lived assets, (ii) accounting for income taxes and (iii) stock-based compensation to be its most significant estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified for comparability with the current year presentation . |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2015, the FASB issued new accounting guidance which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. In August 2015, additional accounting guidance was issued on this topic that clarifies the April 2015 guidance for debt issuance costs associated with line-of-credit arrangements, which states the FASB would not object to the continued deferral and presentation of debt issuance costs as an asset, which would be subsequently amortized over the term of the arrangement. This guidance is effective for fiscal years, and the interim periods within those fiscal years, beginning after December 15, 2015, with early application permitted. The Company has early adopted this guidance. The retrospective application of this guidance decreased “Other assets” and “Long-term debt” by $ 2 million on the consolidated balance sheet as of December 31, 2014. Refer to “Note 7— Debt” below for the current year presentation. |
New Accounting Pronouncements Not yet Adopted | New Accounting Pronouncements Not Yet Adopted In September 2015, the FASB issued new accounting guidance which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. This update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements and related disclosures. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers. The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment | Property and equipment consists of the following (amounts in millions): December 31, 2015 2014 Building $ — Leasehold improvements Computer equipment Furniture, office equipment and other Construction in progress — Total property and equipment $ |
Schedule of stock-based compensation expense | ncluded in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2015, 2014 and 2013 (amounts in millions): December 31, 2015 2014 2013 Operating expense $ Selling, general and administrative $ |
Reconciliation of Basic and Diluted Weighted Average Shares | Years ended December 31, 2015 2014 number of shares in millions Basic EPS Potentially dilutive shares — — Diluted EPS |
Supplemental Disclosures to C24
Supplemental Disclosures to Consolidated Statements of Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Disclosures to Consolidated Statements of Cash Flow | |
Schedule of supplemental cash flow | Years ended December 31, 2015 2014 2013 amounts in millions Cash paid for acquisitions: Intangibles not subject to amortization $ Intangibles subject to amortization Fair value of other assets acquired Net liabilities assumed — Deferred tax assets (liabilities) Other — Cash paid for acquisitions, net of cash (acquired) $ Cash paid for interest $ Cash paid for income taxes $ |
TripAdvisor, Inc. Acquisition25
TripAdvisor, Inc. Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
2015 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocation | T he following table presents the initial purchase price allocations recorded on our consolidated balance sheet for all 2015 acquisitions (in millions): Goodwill $ Intangible assets Net tangible assets Deferred tax liabilities, net Total purchase price consideration $ |
2014 Acquisitions | |
Business Acquisition [Line Items] | |
Schedule of purchase price allocation | The following table presents the purchase price allocations recorded on our consolidated balance sheet for all 2014 acquisitions (in millions): Net assets (including acquired cash) $ Goodwill Intangible assets Deferred tax liabilities, net Accrued expenses and other liabilities Total purchase price consideration $ |
Assets and Liabilities Measur26
Assets and Liabilities Measured at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | December 31, 2015 December 31, 2014 Quoted prices Significant Quoted prices Significant in active other in active other markets for observable markets for observable identical assets inputs identical assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ — Marketable securities $ — — Available-for-sale securities $ — — |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Other Intangible Assets | |
Schedule of goodwill carrying amount | Changes in the carrying amount of goodwill are as follows (amounts in millions): Corporate TripAdvisor and Other Total Balance at January 1, 2014 $ — Acquisition (1) — Other (2) — Balance at December 31, 2014 — Acquisition (1) — Other (2) — Balance at December 31, 2015 $ — (1) Additions to goodwill relate to TripAdvisor’s acquisitions. See “Note 4 – TripAdvisor, Inc. Acquisitions and Dispositions,” for further information. (2) Other changes are primarily due to foreign currency translation on goodwill. |
Schedule of intangible assets subject to amortization | December 31, 2015 December 31, 2014 Weighted Average Gross Net Gross Net Remaining carrying Accumulated carrying carrying Accumulated carrying Useful Life amount amortization amount amount amortization amount in years amounts in millions Customer relationships Other Total |
Schedule of future amortization expense | The estimated future amortization expense for the next five years related to intangible assets with definite lives as of December 31, 2015 , assuming no subsequent impairment of the underlying assets, is as follows (amounts in millions): 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of outstanding debt | December 31, December 31, 2015 2014 amounts in millions TripAdvisor 2011 Credit Facility $ — TripAdvisor 2015 Credit Facility — TripCo margin loans Chinese credit facilities Unamortized discount and debt issuance costs Total consolidated TripCo debt $ Less debt classified as current Total long-term debt $ |
Trip Advisor | |
Value of shares pledged as collateral pursuant to the margin loan agreements | Number of Shares Pledged as Collateral as of Share value as of Pledged Collateral December 31, 2015 December 31, 2015 amounts in millions Common Stock $ Class B Common Stock $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of income tax expense | Years ended December 31, 2015 2014 2013 amounts in millions Current: Federal $ State and local Foreign $ Deferred: Federal $ State and local Foreign Income tax benefit (expense) $ |
Schedule of income before income taxes | Years ended December 31, 2015 2014 2013 amounts in millions Domestic $ Foreign Total $ |
Schedule of income tax expense reconciliation to the effective tax rate | Years ended December 31, 2015 2014 2013 amounts in millions Computed expected tax benefits (expense) $ State and local taxes, net of federal income taxes Foreign taxes, net of foreign tax credits Change in estimated tax rate Basis difference in consolidated subsidiary — Change in valuation allowance Change in unrecognized tax benefits Other Income tax (expense) benefit $ |
Schedule of deferred tax assets and liabilities | December 31, 2015 2014 amounts in millions Deferred tax assets: Loss carryforwards $ Stock-based compensation Other Total deferred tax assets Less: valuation allowance Net deferred tax assets Deferred tax liabilities: Intangible assets Investments Other Total deferred tax liabilities Net deferred tax liability $ |
Schedule of gross unrecognized tax benefit | A reconciliation of unrecognized tax benefits is as follows (amounts in millions): Years ended December 31, 2015 2014 2013 Balance at beginning of year $ Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years — — Balance at end of year $ |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Amounts of stock-based compensation | ncluded in the accompanying consolidated statements of operations are the following amounts of stock-based compensation for the years ended December 31, 2015, 2014 and 2013 (amounts in millions): December 31, 2015 2014 2013 Operating expense $ Selling, general and administrative $ |
Series A | |
Schedule of stock-based compensation activity | Weighted average remaining Aggregate contractual intrinsic Series A WAEP life value in thousands in years in millions Outstanding at January 1, 2015 $ Granted $ Exercised $ Forfeited/Cancelled $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ |
Series B | |
Schedule of stock-based compensation activity | Weighted average remaining Aggregate contractual intrinsic Series B WAEP life value in thousands in years (in millions) Outstanding at January 1, 2015 $ Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 — $ — — $ — |
Trip Advisor | |
Schedule of stock-based compensation activity | Weighted Average Remaining Aggregate Number of Contractual Intrinsic Options WAEP Life Value (in thousands) (in years) (in millions) Outstanding at January 1, 2015 $ Granted $ Exercised $ Cancelled or expired $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Schedule of estimated future minimum rental payments under operating leases | The following table presents TripCo’s estimated future minimum rental payments under operating leases with non-cancelable lease terms, including the new TripAdvisor headquarters lease, that expire after December 31, 2015 (amounts in millions): 2016 $ 2017 2018 2019 2020 Thereafter $ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Schedule of performance measures | Years ended December 31, 2015 2014 2013 Adjusted Adjusted Adjusted Revenue OIBDA Revenue OIBDA Revenue OIBDA amounts in millions TripAdvisor $ Corporate and other Consolidated TripCo $ |
Schedule of other information | December 31, 2015 December 31, 2014 Total Capital Total Capital Assets expenditures Assets expenditures amounts in millions TripAdvisor $ Corporate and other Consolidated TripCo $ |
Schedule of revenue by geographic area | December 31, 2015 2014 2013 amounts in millions United States $ United Kingdom Other countries Consolidated TripCo $ |
Schedule of long-lived assets by geographic area | December 31, 2015 2014 amounts in millions United States $ Other countries Consolidated TripCo $ |
Reconciliation of segment Adjusted OIBDA to earnings (loss) before income taxes | Years ended December 31, 2015 2014 2013 amounts in millions Consolidated Adjusted OIBDA $ Stock settled charitable contribution — — Stock-based compensation Depreciation and amortization Impairment of intangible assets Interest expense Other, net Earnings (loss) before income taxes $ |
Quarterly Financial Informati33
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information (Unaudited) | |
Schedule of quarterly financial information | 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2015: Revenue $ Operating income (loss) $ Net earnings (loss) $ Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B Stockholders per common share $ 1 st 2 nd 3 rd 4 th Quarter Quarter Quarter Quarter amounts in millions, except per share amounts 2014: Revenue $ Operating income (loss) $ Net earnings (loss) $ Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders $ Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B stockholders per common share $ Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A and Series B Stockholders per common share $ |
Basis of Presentation (Details)
Basis of Presentation (Details) - Trip Advisor | 12 Months Ended |
Dec. 31, 2015item | |
Number of Countries in which Entity Operates | 46 |
Number of travel brands | 23 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details) - USD ($) | Aug. 27, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Period accounts receivable are generally due | 30 days | |||
Allowance for doubtful accounts | $ 6,000,000 | $ 7,000,000 | ||
Inventory valuation allowance | 3,000,000 | 3,000,000 | ||
Inventory written down | 3,000,000 | 3,000,000 | ||
Previously Reserved Inventory | $ 1,000,000 | 4,000,000 | ||
Maximum invested cash maturity period | 18 months | |||
Maximum security maturity period | 3 years | |||
Total property and equipment | $ 216,000,000 | 174,000,000 | ||
Foreign currency exchange loss | 3,000,000 | 10,000,000 | $ 0 | |
Sales returns and allowance | 3,000,000 | 2,000,000 | 3,000,000 | |
Advertising expense | 519,000,000 | 357,000,000 | 251,000,000 | |
Stock-based compensation | 82,000,000 | 74,000,000 | 60,000,000 | |
Trade and other receivables, net | $ 181,000,000 | 153,000,000 | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | (2,000,000) | |||
New Accounting Pronouncement - Change in Current Deferred Tax Asset | (11,000,000) | |||
New Accounting Pronouncement - Change in Other Assets | (2,000,000) | |||
New Accounting Pronouncement - Change in Deferred Tax Liabilities | $ 13,000,000 | |||
Pro Forma Earnings per Share (EPS) | ||||
Common stock shares issued | 73,685,924 | |||
Basic EPS (In Shares) | 75,000,000 | 74,000,000 | ||
Diluted EPS (In Shares) | 75,000,000 | 74,000,000 | ||
Operating expense | ||||
Stock-based compensation | $ 32,000,000 | $ 32,000,000 | 26,000,000 | |
Selling, general and administrative | ||||
Stock-based compensation | 50,000,000 | 42,000,000 | $ 34,000,000 | |
Building | ||||
Total property and equipment | 123,000,000 | |||
Leasehold improvements | ||||
Total property and equipment | 34,000,000 | 36,000,000 | ||
Computer equipment | ||||
Total property and equipment | 38,000,000 | 34,000,000 | ||
Furniture, office equipment and other | ||||
Total property and equipment | $ 21,000,000 | 17,000,000 | ||
Furniture, office equipment and other | Minimum | ||||
Property estimated useful life | 3 years | |||
Furniture, office equipment and other | Maximum | ||||
Property estimated useful life | 5 years | |||
Construction in progress | ||||
Total property and equipment | 87,000,000 | |||
Trip Advisor | ||||
Stock-based compensation | $ 77,000,000 | |||
Deferred merchant payables | $ 105,000,000 | $ 93,000,000 | ||
Trip Advisor | Revenue | Customer | Expedia and Priceline | ||||
Customer concentration (as a percent) | 46.00% | 46.00% | 47.00% | |
Trip Advisor | Building | ||||
Property estimated useful life | 40 years |
Supplemental Disclosures to C36
Supplemental Disclosures to Consolidated Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash paid for acquisitions | |||
Fair value of assets acquired | $ 2 | $ 25 | $ 2 |
Intangibles not subject to amortization | 17 | 253 | 30 |
Intangibles subject to amortization | 12 | 194 | 19 |
Net liabilities assumed | (96) | (15) | |
Deferred tax assets (liabilities) | (2) | (40) | 1 |
Other | (5) | (2) | |
Cash paid for acquisition, net of cash (acquired) | 29 | 331 | 35 |
Cash paid for interest | 7 | 8 | 9 |
Cash paid for income taxes | 44 | 54 | 50 |
Capitalization of construction-in-process costs | $ 6 | $ 62 | $ 8 |
TripAdvisor, Inc. Acquisition37
TripAdvisor, Inc. Acquisitions and Dispositions (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($)item | |
Acquisitions | |||
Cash consideration for acquisition | $ 29 | $ 331 | $ 35 |
Goodwill | 3,689 | 3,691 | 3,460 |
Trip Advisor | |||
TripAdvisor, Inc. transactions | |||
Proceeds from Sale of Other Investments | 28 | ||
Disposal Group, Not Discontinued Operation, Assets of Disposal Group | 11 | ||
Disposal Group, Not Discontinued Operation, Cash | 3 | ||
Disposal Group, Not Discontinued Operation, Liabilities of Disposal Group | 4 | ||
Acquisitions | |||
Goodwill | $ 3,689 | $ 3,691 | $ 3,460 |
Trip Advisor | 2013 Acquisitions | |||
Acquisitions | |||
Number of businesses acquired | item | 6 | ||
Cash consideration for acquisition | $ 35 | ||
Acquisition-related costs | $ 2 | ||
Trip Advisor | 2014 Acquisitions | |||
Acquisitions | |||
Number of businesses acquired | item | 7 | ||
Cash consideration for acquisition | $ 331 | ||
Acquisition-related costs | 4 | ||
Net assets (including acquired cash) | 94 | ||
Goodwill | 253 | ||
Intangible assets | 194 | ||
Tangible Assets | 94 | ||
Deferred tax liabilities, net | (40) | ||
Accrued expenses and other current liabilities | (101) | ||
Total purchase price consideration | 400 | ||
Goodwill expected to be tax deductible | $ 5 | ||
Definite-lived intangible assets weighted-average life | 7 years | ||
Trip Advisor | 2015 Acquisitions | |||
TripAdvisor, Inc. transactions | |||
Ownership acquired (as a percent) | 100.00% | ||
Acquisitions | |||
Number of businesses acquired | item | 3 | ||
Cash consideration for acquisition | $ 28 | ||
Acquisition-related costs | 1 | ||
Net assets (including acquired cash) | 1 | ||
Goodwill | 17 | ||
Intangible assets | 12 | ||
Tangible Assets | 1 | ||
Deferred tax liabilities, net | (2) | ||
Total purchase price consideration | $ 28 | ||
Definite-lived intangible assets weighted-average life | 6 years | ||
Trip Advisor | 2015 Acquisitions | Trade Names | |||
Acquisitions | |||
Intangible assets | $ 2 | ||
Trip Advisor | 2015 Acquisitions | Customer Lists and Relationships | |||
Acquisitions | |||
Intangible assets | 7 | ||
Trip Advisor | 2015 Acquisitions | Technology-Based Intangible Assets | |||
Acquisitions | |||
Intangible assets | $ 3 |
TripAdvisor, Inc. Acquisition38
TripAdvisor, Inc. Acquisitions and Dispositions (Details) - Trip Advisor $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Sale of Stock, Percentage of Ownership before Transaction | 100.00% |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 20 |
Assets and Liabilities Measur39
Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 47 | $ 108 |
Available-for-sale securities | 37 | 31 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 44 | 58 |
Marketable securities | 47 | 108 |
Available-for-sale securities | 37 | 31 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 39 | 58 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5 | |
Marketable securities | 47 | 108 |
Available-for-sale securities | $ 37 | $ 31 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill | |||
Goodwill, beginning balance | $ 3,691 | $ 3,460 | |
Acquisition | 17 | 253 | |
Other | (19) | (22) | |
Goodwill, ending balance | 3,689 | 3,691 | $ 3,460 |
Intangible Assets subject to amortization | |||
Gross Carrying Amount | 1,409 | 1,407 | |
Accumulated Amortization | (784) | (566) | |
Net Carrying Amount | 625 | 841 | |
Amortization expense | 245 | 279 | 303 |
Future amortization expense | |||
2,016 | 193 | ||
2,017 | 175 | ||
2,018 | 112 | ||
2,019 | 108 | ||
2,020 | 103 | ||
Impairments | |||
Impairment expense | $ 2 | 2 | 3 |
Customer relationships | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 5 years | ||
Gross Carrying Amount | $ 965 | 979 | |
Accumulated Amortization | (599) | (456) | |
Net Carrying Amount | $ 366 | 523 | |
Other | |||
Intangible Assets subject to amortization | |||
Weighted Average Remaining Useful Life | 6 years | ||
Gross Carrying Amount | $ 444 | 428 | |
Accumulated Amortization | (185) | (110) | |
Net Carrying Amount | 259 | 318 | |
Trip Advisor | |||
Goodwill | |||
Goodwill, beginning balance | 3,691 | 3,460 | |
Acquisition | 17 | 253 | |
Other | (19) | (22) | |
Goodwill, ending balance | 3,689 | $ 3,691 | $ 3,460 |
Buy Seasons | |||
Impairments | |||
Accumulated impairment | $ 46 |
Debt (Details)
Debt (Details) shares in Millions | Jun. 26, 2015USD ($) | Aug. 26, 2014USD ($) | Aug. 21, 2014USD ($)agreement | Dec. 20, 2011USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2015USD ($)shares |
Debt Financing | |||||||||
Outstanding debt | $ 740,000,000 | $ 621,000,000 | |||||||
Unamortized discount and debt issuance costs | (2,000,000) | (1,000,000) | |||||||
Less debt classified as current | (78,000,000) | (1,000,000) | |||||||
Total long-term debt | 662,000,000 | 620,000,000 | |||||||
Repayments of long term debt | $ 431,000,000 | 43,000,000 | $ 66,000,000 | ||||||
Margin loan member | TripCo | |||||||||
Debt Financing | |||||||||
Outstanding debt | 404,000,000 | 421,000,000 | |||||||
Debt Instrument Term | 3 years | ||||||||
Debt instrument, number of instruments | agreement | 2 | ||||||||
Total borrowings | $ 400,000,000 | ||||||||
Paid-in-Kind Interest | $ 17,000,000 | ||||||||
Outstanding Margin Loan Balance If Initial Margin Call Threshold is Met | 300,000,000 | ||||||||
Maximum Value of Promissory Note if Margin Call Thresholds Are Triggered | 200,000,000 | ||||||||
Margin loan member | TripCo | Redemption period one | |||||||||
Debt Financing | |||||||||
Initial redemption period | 6 months | ||||||||
Margin loan member | LIBOR | TripCo | |||||||||
Debt Financing | |||||||||
Variable rate basis | LIBOR | ||||||||
Margin loan member | LIBOR | TripCo | Redemption period one | |||||||||
Debt Financing | |||||||||
Margin | 3.65% | ||||||||
Margin loan member | LIBOR | TripCo | Redemption period two | |||||||||
Debt Financing | |||||||||
Margin | 3.25% | ||||||||
Chinese credit facilities | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Outstanding debt | 38,000,000 | 1,000,000 | |||||||
Less debt classified as current | (38,000,000) | (1,000,000) | |||||||
2011 Credit Facility | Trip Advisor | |||||||||
Debt Financing | |||||||||
Outstanding debt | $ 600,000,000 | ||||||||
Repayments of long term debt | $ 290,000,000 | ||||||||
2011 Credit Facility | Line of Credit | Trip Advisor | |||||||||
Debt Financing | |||||||||
Outstanding debt | $ 300,000,000 | ||||||||
2011 Credit Facility | Term loan | Trip Advisor | |||||||||
Debt Financing | |||||||||
Maximum borrowing capacity | $ 400,000,000 | ||||||||
Debt Instrument Term | 5 years | ||||||||
2011 Credit Facility | Revolving Credit Facility | Trip Advisor | |||||||||
Debt Financing | |||||||||
Debt Instrument Term | 5 years | ||||||||
Total borrowings | $ 200,000,000 | ||||||||
2015 Credit Facility | Trip Advisor | |||||||||
Debt Financing | |||||||||
Deferred Finance Costs, Net | 3,000,000 | ||||||||
2015 Credit Facility | Revolving Credit Facility | Trip Advisor | |||||||||
Debt Financing | |||||||||
Outstanding debt | $ 200,000,000 | ||||||||
Maximum borrowing capacity | $ 1,000,000,000 | ||||||||
Debt Instrument Term | 5 years | ||||||||
Margin | 2.00% | ||||||||
Commitment fee | 0.20% | ||||||||
Interest rate | 1.70% | 1.70% | |||||||
Repayments of Debt | $ 90,000,000 | ||||||||
2015 Credit Facility | Revolving Credit Facility | LIBOR | Trip Advisor | |||||||||
Debt Financing | |||||||||
Variable rate basis | LIBOR | ||||||||
Margin | 1.25% | ||||||||
2015 Credit Facility | Revolving Credit Facility | ABR | Trip Advisor | |||||||||
Debt Financing | |||||||||
Variable rate basis | Alternate | ||||||||
Margin | 2.00% | ||||||||
2015 Credit Facility | Revolving Credit Facility | Euro | Trip Advisor | |||||||||
Debt Financing | |||||||||
Margin | 2.00% | ||||||||
2015 Credit Facility | Letter of Credit | Trip Advisor | |||||||||
Debt Financing | |||||||||
Outstanding debt | $ 2,000,000 | ||||||||
Maximum borrowing capacity | 15,000,000 | ||||||||
2015 Credit Facility | Same-day notice borrowings | Trip Advisor | |||||||||
Debt Financing | |||||||||
Maximum borrowing capacity | 40,000,000 | ||||||||
Chinese Credit Facility-BOA | People's Bank of China base rate | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Maximum borrowing capacity | 30,000,000 | ||||||||
Line of Credit | $ 1,000,000 | ||||||||
Chinese Credit Facility-BOA | Chinese credit facilities | |||||||||
Debt Financing | |||||||||
Interest rate | 4.35% | 4.35% | |||||||
Chinese Credit Facility-BOA | Chinese credit facilities | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Repayments of Debt | $ 22,000,000 | ||||||||
Chinese Credit Facility-BOA | Chinese credit facilities | People's Bank of China base rate | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Debt Instrument Term | 1 year | ||||||||
Debt instrument applicable percentage base rate | 100 | 100 | |||||||
Chinese Credit Facility-JPM | Chinese credit facilities | |||||||||
Debt Financing | |||||||||
Interest rate | 4.35% | 4.35% | |||||||
Chinese Credit Facility-JPM | Chinese credit facilities | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Repayments of Debt | $ 19,000,000 | ||||||||
Chinese Credit Facility-JPM | Chinese credit facilities | People's Bank of China base rate | TripAdvisor's Chinese subsidiaries | |||||||||
Debt Financing | |||||||||
Maximum borrowing capacity | ¥ 125,000,000 | $ 20,000,000 | |||||||
Debt Instrument Term | 1 year | ||||||||
Debt instrument applicable percentage base rate | 100 | 100 | |||||||
Series A | Margin loan member | Trip Advisor | |||||||||
Debt Financing | |||||||||
Shares pledged as collateral under loan | shares | 18.2 | 18.2 | |||||||
Share value | $ 1,552,000,000 | ||||||||
Series B | Margin loan member | Trip Advisor | |||||||||
Debt Financing | |||||||||
Shares pledged as collateral under loan | shares | 12.8 | 12.8 | |||||||
Share value | $ 1,091,000,000 | ||||||||
Liberty | |||||||||
Debt Financing | |||||||||
Payment of distribution | $ 348,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 27, 2014 | |
Income taxes payable deemed equity contribution | $ 29 | |||
Current: | ||||
Federal | $ (42) | $ (77) | $ (32) | |
State and local | (7) | (22) | (10) | |
Foreign | (26) | (6) | (20) | |
Total current income tax expense | (75) | (105) | (62) | |
Deferred: | ||||
Federal | 52 | 55 | 9 | |
State and local | 7 | (16) | 76 | |
Foreign | 26 | 31 | 32 | |
Total deferred income tax expense | 85 | 70 | 117 | |
Income tax (expense) benefit | 10 | (35) | 55 | |
Income before income taxes | ||||
Domestic | (70) | 4 | (23) | |
Foreign | 74 | 40 | (5) | |
Total | 4 | 44 | (28) | |
Differences between provision for income taxes and income tax expense computed by applying federal rates | ||||
Computed expected tax benefits (expense) | (1) | (16) | 10 | |
State and local taxes, net of federal income taxes | 2 | (7) | (3) | |
Foreign taxes, net of foreign tax credits | 48 | 28 | 15 | |
Change in tax rate | 3 | (15) | 46 | |
Basis difference in consolidated subsidiary | (21) | (5) | ||
Change in valuation allowance | (7) | (7) | (3) | |
Change in unrecognized tax benefits | (12) | (14) | (9) | |
Other | (2) | 1 | (1) | |
Income tax (expense) benefit | 10 | (35) | $ 55 | |
Stock based compensation in intercompany cost sharing arrangements | 13 | |||
Deferred tax assets: | ||||
Net operating loss carryforwards | 89 | 48 | ||
Stock-based compensation | 56 | 45 | ||
Other | 65 | 61 | ||
Total deferred tax assets | 210 | 154 | ||
Less: valuation allowance | (23) | (23) | ||
Net deferred tax assets | 187 | 131 | ||
Deferred tax liabilities: | ||||
Intangible assets | (811) | (870) | ||
Investments | (33) | (12) | ||
Other | (62) | (57) | ||
Total deferred tax liabilities | (906) | (939) | ||
Net deferred tax liability | (719) | (808) | ||
Deferred tax balance sheet classification | ||||
Noncurrent deferred tax liability | (719) | (808) | ||
Net deferred tax liability | 719 | $ 808 | ||
Valuation allowance income tax expense affect | 7 | |||
Valuation allowance sale of subsidiary | (7) | |||
Undistributed earnings of certain foreign combined companies | 759 | |||
Parent Company [Member] | ||||
Deferred tax assets: | ||||
Net operating loss carryforwards | 34 | |||
Trip Advisor | ||||
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 55 |
Income Taxes (Details)43
Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating loss carryforwards | |||
Net operating loss carryforwards | $ 89 | $ 48 | |
Unrecognized tax benefits | |||
Balance at beginning of year | 67 | 36 | $ 24 |
Additions based on tax positions related to the current year | 15 | 13 | 12 |
Additions for tax positions of prior years | 7 | 18 | 4 |
Reductions for tax positions of prior years | (4) | ||
Balance at end of year | 89 | 67 | 36 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 53 | 65 | $ 19 |
Accrued interest and penalties related to uncertain tax positions | 6 | $ 4 | |
State | |||
Operating loss carryforwards | |||
Operating loss carryforwards not expected to be utilized | 6 | ||
Foreign | |||
Operating loss carryforwards | |||
Operating loss carryforwards not expected to be utilized | 17 | ||
Parent Company [Member] | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 34 | ||
Trip Advisor | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | $ 55 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional disclosures | |||
Stock-based compensation | $ 82,000,000 | $ 74,000,000 | $ 60,000,000 |
Series A | |||
Stock-Based Compensation | |||
Vesting period | 1 year | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding | 1,090,000 | ||
Granted | 25,000 | ||
Exercised | (394,000) | ||
Cancelled or expired | (1,000) | ||
Options outstanding | 720,000 | 1,090,000 | |
Options exercisable | 628,000 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 13.94 | ||
Weighted average exercise price, options granted (in dollars per share) | 30.46 | ||
Weighted average exercise price, options exercised (in dollars per share) | 13.61 | ||
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 22.75 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 14.67 | $ 13.94 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 13.63 | ||
Weighted average remaining contractual term outstanding | 3 years 6 months | ||
Weighted average remaining contractual term exercisable | 3 years 1 month 6 days | ||
Outstanding, aggregate intrinsic value | $ 11,000,000 | ||
Exercisable, aggregate intrinsic value | $ 11,000,000 | ||
Additional disclosures | |||
Weighted average grant date fair value, unvested, RSUs (in dollars per share) | $ 12.66 | ||
Series B | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding | 1,797,000 | ||
Options outstanding | 1,797,000 | 1,797,000 | |
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 27.83 | ||
Weighted average exercise price, options outstanding (in dollars per share) | $ 27.83 | $ 27.83 | |
Weighted average remaining contractual term outstanding | 9 years | ||
Outstanding, aggregate intrinsic value | $ 5,000,000 | ||
Trip Advisor | |||
Additional disclosures | |||
Stock-based compensation | $ 77,000,000 | ||
2011 Plan | Trip Advisor | |||
Stock-Based Compensation | |||
Number of shares available for grant | 17,200,758 | ||
Fair value assumptions | |||
Expected term | 5 years 4 months 24 days | 5 years 9 months 18 days | 6 years 1 month 6 days |
Volatility rate (as a percent) | 41.80% | 44.00% | 50.80% |
2014 Plan | |||
Additional disclosures | |||
Unvested value not yet recognized | $ 20,000,000 | ||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 4 months 24 days | ||
Restricted Stock Units (RSUs) | Trip Advisor | |||
Additional disclosures | |||
Weighted average grant date fair value (in dollars per share) | $ 82.95 | ||
Weighted average grant date fair value, unvested, RSUs (in dollars per share) | $ 79.02 | ||
Restricted Stock Units (RSUs) | 2011 Plan | Trip Advisor | |||
Additional disclosures | |||
RSUs granted (in shares) | 1,000,000 | ||
Unvested RSUs (in shares) | 1,800,000 | ||
Unrecognized compensation cost, unvested RSUs | $ 94,000,000 | ||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 8 months 12 days | ||
Stock Options | 2011 Plan | Trip Advisor | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding | 8,651,000 | ||
Granted | 587,000 | ||
Exercised | (3,187,000) | ||
Cancelled or expired | (331,000) | ||
Options outstanding | 5,720,000 | 8,651,000 | |
Options exercisable | 2,480,000 | ||
WAEP | |||
Weighted average exercise price, options outstanding (in dollars per share) | $ 44.47 | ||
Weighted average exercise price, options granted (in dollars per share) | 83.78 | ||
Weighted average exercise price, options exercised (in dollars per share) | 33.78 | ||
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 57.44 | ||
Weighted average exercise price, options outstanding (in dollars per share) | 53.71 | $ 44.47 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 36.69 | ||
Weighted average remaining contractual term outstanding | 5 years 7 months 6 days | ||
Weighted average remaining contractual term exercisable | 4 years 3 months 18 days | ||
Outstanding, aggregate intrinsic value | $ 187,000,000 | ||
Exercisable, aggregate intrinsic value | 122,000,000 | ||
Additional disclosures | |||
Unrecognized compensation cost, unvested options (in dollars) | $ 56,000,000 | ||
Weighted average period the unrecognized compensation cost will be recognized | 2 years 6 months | ||
Stock Options | 2014 Plan | |||
Stock-Based Compensation | |||
Maximum number of shares | 6,700,000 | ||
Fair value assumptions | |||
Volatility rate, minimum (as a percent) | 40.80% | ||
Volatility rate, maximum (as a percent) | 45.90% | ||
Dividend | $ 0 | ||
Additional disclosures | |||
Stock options exercised intrinsic value | $ 7,300,000 | $ 10,700,000 | |
Stock Options | 2014 Plan | Series B | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Granted | 0 | ||
Stock Options | 2014 Plan | Buy Seasons | |||
Additional disclosures | |||
Stock options exercised intrinsic value | $ 1,600,000 | ||
Employee Stock Option Excluding Assumed Options | 2011 Plan | Trip Advisor | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Term of awards | 10 years | ||
WAEP | |||
Weighted average exercise price, grant date fair value (in dollars per share) | $ 33.02 | ||
Minimum | Stock Options | 2014 Plan | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Term of awards | 7 years | ||
Fair value assumptions | |||
Expected term | 6 years | ||
Maximum | Stock Options | 2014 Plan | |||
Stock-Based Compensation | |||
Vesting period | 5 years | ||
Term of awards | 10 years | ||
Fair value assumptions | |||
Expected term | 7 years |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit Plans | |||
Employer cash contribution | $ 7 | $ 5 | $ 5 |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Standstill Agreement Cap | 34.90% |
Commitments and Contingencies47
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2015USD ($)ft²location | Dec. 31, 2015USD ($)ft²location | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Operating leases | ||||
Capitalization of construction-in-process costs | $ 6 | $ 62 | $ 8 | |
Rental expense | $ 22 | $ 22 | $ 15 | |
TripAdvisor Historical funding to TA Foundation | 2.00% | |||
Non-cash contribution to charitable foundation | $ 67 | |||
Trip Advisor | ||||
Estimated future minimum rental payments | ||||
2,016 | $ 25 | 25 | ||
2,017 | 26 | 26 | ||
2,018 | 26 | 26 | ||
2,019 | 25 | 25 | ||
2,020 | 25 | 25 | ||
Thereafter | 158 | 158 | ||
Total | $ 285 | $ 285 | ||
Trip Advisor | Other leased locations | ||||
Operating leases | ||||
Leased area (in square feet) | ft² | 410,000 | 410,000 | ||
Number of locations | location | 40 | 40 | ||
Trip Advisor | Needham, MA | ||||
Operating leases | ||||
Estimated future annual lease payments | $ 9.5 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segments | |||||||||||
Total revenues | $ 345 | $ 432 | $ 414 | $ 374 | $ 325 | $ 375 | $ 335 | $ 294 | $ 1,565 | $ 1,329 | $ 1,034 |
Adjusted OIBDA | 434 | 442 | 361 | ||||||||
Total assets | 7,285 | 7,366 | 7,285 | 7,366 | |||||||
Capital expenditures | 112 | 90 | |||||||||
Long-Lived Assets | 180 | 138 | 180 | 138 | |||||||
United States | |||||||||||
Segments | |||||||||||
Total revenues | 807 | 670 | 541 | ||||||||
Long-Lived Assets | 150 | 124 | 150 | 124 | |||||||
United Kingdom | |||||||||||
Segments | |||||||||||
Total revenues | 215 | 191 | 141 | ||||||||
Other countries | |||||||||||
Segments | |||||||||||
Total revenues | 543 | 468 | 352 | ||||||||
Long-Lived Assets | 30 | 14 | 30 | 14 | |||||||
Trip Advisor | |||||||||||
Segments | |||||||||||
Total revenues | 1,492 | 1,246 | 945 | ||||||||
Adjusted OIBDA | 464 | 468 | 379 | ||||||||
Total assets | 7,235 | 7,284 | 7,235 | 7,284 | |||||||
Capital expenditures | 109 | 81 | |||||||||
Corporate and Other | |||||||||||
Segments | |||||||||||
Total revenues | 73 | 83 | 89 | ||||||||
Adjusted OIBDA | (30) | (26) | $ (18) | ||||||||
Total assets | $ 50 | $ 82 | 50 | 82 | |||||||
Capital expenditures | $ 3 | $ 9 |
Segment Information (Details)49
Segment Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Information | |||
Consolidated segment Adjusted OIBDA | $ 434 | $ 442 | $ 361 |
Stock settled charitable contribution | (67) | ||
Stock-based compensation | (82) | (74) | (60) |
Depreciation And amortization | (268) | (298) | (315) |
Impairment of intangible assets | (2) | (2) | (3) |
Interest expense | (28) | (13) | (12) |
Other, net | 17 | (11) | 1 |
Earnings (loss) before income taxes | $ 4 | $ 44 | $ (28) |
Quarterly Financial Informati50
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information (Unaudited) | |||||||||||
Revenue | $ 345 | $ 432 | $ 414 | $ 374 | $ 325 | $ 375 | $ 335 | $ 294 | $ 1,565 | $ 1,329 | $ 1,034 |
Operating income (loss) | (83) | 35 | 25 | 38 | (9) | 17 | 31 | 29 | 15 | 68 | (17) |
Net earnings (loss) | (45) | 29 | 13 | 17 | (33) | 2 | 17 | 23 | 14 | 9 | 27 |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A, Series B and Series C stockholders | $ (23) | $ (3) | $ (7) | $ (7) | $ (21) | $ (5) | $ (1) | $ 5 | $ (40) | $ (22) | $ (7) |
Basic earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A, Series B and Series C stockholders per common share | $ (0.31) | $ (0.04) | $ (0.09) | $ (0.09) | $ (0.29) | $ (0.07) | $ (0.01) | $ 0.07 | $ (0.53) | $ (0.30) | $ (0.10) |
Diluted earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. Series A, Series B and Series C Stockholders per common share | $ (0.31) | $ (0.04) | $ (0.09) | $ (0.09) | $ (0.29) | $ (0.07) | $ (0.01) | $ 0.07 | $ (0.53) | $ (0.30) | $ (0.10) |