Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Entity Registrant Name | Liberty TripAdvisor Holdings, Inc. | |
Entity Central Index Key | 1,606,745 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Series A | ||
Entity Common Stock, Shares Outstanding | 72,127,124 | |
Series B | ||
Entity Common Stock, Shares Outstanding | 2,929,777 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 656 | $ 695 |
Accounts receivable and contract assets, net of allowance for doubtful accounts of $17 million and $16 million, respectively | 281 | 230 |
Other current assets | 68 | 120 |
Total current assets | 1,005 | 1,045 |
Property and equipment, at cost | 229 | 226 |
Accumulated depreciation | (67) | (61) |
Property and equipment, net | 162 | 165 |
Intangible assets not subject to amortization: | ||
Goodwill | 2,450 | 2,445 |
Trademarks | 1,276 | 1,272 |
Intangible assets not subject to amortization | 3,726 | 3,717 |
Intangible assets subject to amortization, net | 368 | 382 |
Other assets, at cost, net of accumulated amortization | 131 | 175 |
Total assets | 5,392 | 5,484 |
Current liabilities: | ||
Deferred merchant and other payables | 276 | 164 |
Accrued liabilities | 145 | 135 |
Current portion of debt (note 6) | 7 | 7 |
Deferred revenue | 101 | 60 |
Other current liabilities | 6 | 6 |
Total current liabilities | 535 | 372 |
Long-term debt (note 6) | 477 | 704 |
Deferred income tax liabilities | 333 | 332 |
Other liabilities | 299 | 323 |
Total liabilities | 1,644 | 1,731 |
Equity: | ||
Additional paid-in capital | 240 | 250 |
Accumulated other comprehensive earnings (loss), net of taxes | (20) | (23) |
Retained earnings | 166 | 196 |
Total stockholders' equity | 387 | 424 |
Noncontrolling interests in equity of subsidiaries | 3,361 | 3,329 |
Total equity | 3,748 | 3,753 |
Commitments and contingencies (note 7) | ||
Total liabilities and equity | 5,392 | 5,484 |
Preferred Stock | ||
Equity: | ||
Preferred stock, $.01 par value. Authorized shares 50,000,000; no shares issued. | ||
Series A | ||
Equity: | ||
Common stock value | 1 | 1 |
Series B | ||
Equity: | ||
Common stock value | ||
Series C | ||
Equity: | ||
Common stock value |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Trade and other receivables, net of allowance for doubtful accounts | $ 17 | $ 16 |
Preferred Stock | ||
Equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 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 | 72,126,954 | 72,127,285 |
Common stock, shares outstanding | 72,126,954 | 72,127,285 |
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 | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total revenues | $ 378 | $ 378 |
Operating costs and expenses: | ||
Operating expense, including stock-based compensation (note 3) | 87 | 84 |
Selling, general and administrative, including stock-based compensation (note 3) | 243 | 245 |
Depreciation and amortization | 39 | 56 |
Total operating costs and expenses | 369 | 385 |
Operating income (loss) | 9 | (7) |
Other income (expense): | ||
Interest expense | (6) | (5) |
Realized and unrealized gains (losses) on financial instruments, net | (23) | 6 |
Other, net | 1 | 1 |
Total other income (expense) | (28) | 2 |
Earnings (loss) before income taxes | (19) | (5) |
Income tax (expense) benefit | (16) | (4) |
Net earnings (loss) | (35) | (9) |
Less net earnings (loss) attributable to noncontrolling interests | (4) | (6) |
Net earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (31) | $ (3) |
Basic net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 4): | $ (0.41) | $ (0.04) |
Diluted net earnings (loss) attributable to Series A and Series B Liberty TripAdvisor Holdings, Inc. shareholders per common share (note 4): | $ (0.41) | $ (0.04) |
Service | ||
Total revenues | $ 378 | $ 372 |
Other | ||
Total revenues | $ 6 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Earnings (Loss) | ||
Net earnings (loss) | $ (35) | $ (9) |
Other comprehensive earnings (loss), net of taxes: | ||
Foreign currency translation adjustments | 15 | 14 |
Other comprehensive earnings (loss) | 15 | 14 |
Comprehensive earnings (loss) | (20) | 5 |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | 8 | $ 5 |
Comprehensive earnings (loss) attributable to Liberty TripAdvisor Holdings, Inc. shareholders | $ (28) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ (35) | $ (9) |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities | ||
Depreciation and amortization | 39 | 56 |
Stock-based compensation | 30 | 20 |
Deferred income tax expense (benefit) | (1) | |
Other noncash charges (credits), net | 24 | (4) |
Changes in operating assets and liabilities | ||
Current and other assets | (45) | (37) |
Payables and other liabilities | 161 | 101 |
Net cash provided (used) by operating activities | 173 | 127 |
Cash flows from investing activities: | ||
Capital expended for property and equipment, including internal-use software and website development | (15) | (18) |
Purchases of short term investments and other marketable securities | (1) | |
Sales and maturities of short term investments and other marketable securities | 44 | 116 |
Net cash provided (used) by investing activities | 28 | 98 |
Cash flows from financing activities: | ||
Borrowings of debt | 5 | 270 |
Repayments of debt | (235) | (224) |
Shares repurchased by subsidiary | (4) | (150) |
Payment of withholding taxes on net share settlements of equity awards | (12) | (13) |
Shares issued by subsidiary | 3 | |
Net cash provided (used) by financing activities | (246) | (114) |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | 6 | 1 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (39) | 112 |
Cash, cash equivalents and restricted cash at beginning of period | 695 | 659 |
Cash, cash equivalents and restricted cash at end of period | $ 656 | $ 771 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Equity - 3 months ended Mar. 31, 2018 - USD ($) $ in Millions | Series ACommon Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest | Total |
Balance at beginning of the period at Dec. 31, 2017 | $ 1 | $ 250 | $ (23) | $ 196 | $ 3,329 | $ 3,753 |
Net earnings (loss) | (31) | (4) | (35) | |||
Other comprehensive earnings (loss) | 3 | 12 | 15 | |||
Stock-based compensation | 8 | 25 | 33 | |||
Withholding taxes on net share settlements of stock based compensation | (12) | (12) | ||||
Shares issued by subsidiary | (4) | 4 | ||||
Shares repurchased by subsidiary | (2) | (8) | (10) | |||
Balance at end of the period at Mar. 31, 2018 | $ 1 | $ 240 | $ (20) | 166 | 3,361 | 3,748 |
Cumulative effect of accounting change | ASU 2014-09 | $ 1 | $ 3 | $ 4 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis During October 2013, the Board of Directors of Liberty Interactive Corporation and its subsidiaries (“Liberty”) (subsequently renamed Qurate Retail, Inc. (“Qurate Retail”)) authorized a plan to distribute to the stockholders of Liberty’s then-outstanding Liberty Ventures common stock shares of a wholly‑owned subsidiary, Liberty TripAdvisor Holdings, Inc. (“TripCo,” “Consolidated TripCo,” the “Company,” “we,” “our” or “us,” unless the context otherwise requires) (the “TripCo Spin‑Off”). TripCo does not have any operations outside of its controlling interest in its subsidiary TripAdvisor, Inc. (“TripAdvisor”) and its former wholly owned subsidiary, BuySeasons, Inc. (“BuySeasons”). TripCo sold its ownership in BuySeasons effective June 30, 2017. The TripCo 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 TripCo Spin-Off was accounted for at historical cost due to the pro rata nature of the distribution to stockholders of Liberty Ventures common stock. TripAdvisor’s financial performance tends to be seasonally highest in the second and third quarters of a year, as it is a key period for leisure travel research and trip-taking, which includes the seasonal peak in traveler hotel and rental stays, and tours and experiences taken, compared to the first and fourth quarters, which represent seasonal low points. BuySeasons is not presented as a discontinued operation as the sale did not represent a strategic shift that had a major effect on TripCo’s operations and financial results. Included in other revenue in the accompanying condensed consolidated statements of operations is $6 million for the three months ended March 31, 2017, related to BuySeasons. Included in net earnings (loss) in the accompanying condensed consolidated statements of operations are losses of $1 million for the three months ended March 31, 2017, related to BuySeasons. The accompanying (a) condensed consolidated balance sheet as of December 31, 2017, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10‑Q and Article 10 of Regulation S‑X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2017 as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 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) recognition and recoverability of goodwill, intangible and long-lived assets and (ii) accounting for income taxes to be its most significant estimates. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted in December 2017. The Tax Act significantly changed U.S. tax law by, among other things, lowering U.S. corporate income tax rate, implementing a territorial tax system and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. In the prior year, we recognized the provisional tax impacts related to the one-time transition tax and the revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. During the three months ended March 31, 2018, we recorded an incremental $5 million of tax expense for the transition tax, reflecting additional information obtained related to earnings and profits, foreign tax credits and state taxes. We are still in the process of analyzing the impact of the various provisions of the Tax Act. The ultimate impact may materially differ from these provisional amounts due to, among other things, continued analysis of the estimates and further guidance and interpretations on the application of the law. We expect to complete our analysis by December 2018. Spin‑Off of TripCo from Liberty Following the TripCo Spin‑Off, Qurate Retail and TripCo operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the TripCo 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 TripCo 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 TripCo Spin‑Off, certain conditions to the TripCo Spin‑Off and provisions governing the relationship between TripCo and Qurate Retail with respect to and resulting from the TripCo 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 reimburses Liberty Media for direct, out‑of‑pocket expenses incurred by Liberty Media in providing these services and TripCo pays a services fee to Liberty Media under the services agreement that is subject to adjustment semi‑annually, as necessary. Under the facilities sharing agreement, TripCo shares office space with Liberty Media 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 Qurate Retail and TripCo and other agreements related to tax matters. Pursuant to the tax sharing agreement, TripCo has agreed to indemnify Qurate Retail, subject to certain limited exceptions, for losses and taxes resulting from the TripCo 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 TripCo Spin-Off). Under these agreements, approximately $1 million was reimbursable to Liberty Media for both of the three month periods ended March 31, 2018 and 2017. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | (2) Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (the “FASB”) issued new accounting guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications, which will reduce diversity in practice. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if the award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), the award’s vesting conditions, and the award’s classification as an equity or liability instrument are the same immediately before and after the change. The guidance also states that an entity is not required to estimate the value of the award immediately before and after the change if the change does not affect any of the inputs to the model used to value the award. The Company adopted this guidance prospectively in the first quarter of 2018. The Company believes the new guidance will likely result in fewer changes to the terms of an award being accounted for as modifications. In August and November 2016, the FASB issued new accounting standards which add and clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows, and add guidance on the presentation of restricted cash in the statement of cash flows, respectively. This new guidance requires entities to show changes in cash, cash equivalents and restricted cash on a combined basis in the statement of cash flows. In addition, this accounting guidance requires a reconciliation of the total cash, cash equivalent and restricted cash in the statement of cash flows to the related captions in the balance sheet if cash, cash equivalents and restricted cash are presented in more than one line item in the balance sheet. The Company adopted this guidance effective January 1, 2018 and applied it retrospectively to all prior periods presented in the financial statements as required under the new guidance. The Company does not currently have material amounts described as restricted cash; however, the Company’s consolidated statement of cash flows for the year ended December 31, 2016 has been recast to present $5 million of restricted cash as beginning of period cash and cash equivalents and $4 million of restricted cash as end of period cash and cash equivalents at March 31, 2017. These amounts were included in other current assets as of December 31, 2016 and March 31, 2017. In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity transfers of assets other than inventory. This accounting update, which is part of the FASB's simplification initiative, is intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company adopted this new guidance in the first quarter of 2018 on a modified retrospective basis. The adoption of this guidance did not have a material impact on the Company’s financial statements. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers, or ASC 606, Revenue from Contracts with Customers (“ASC 606”), which replaced numerous requirements in GAAP, and provides companies with a single model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In addition, the FASB has also issued several amendments to the standard, which clarifies certain aspects of the guidance, including principal versus agent considerations and identifying performance obligations. In the first quarter of 2018, the Company adopted ASC 606, under the modified retrospective method for all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the previous accounting policies under the historical revenue guidance, or ASC 605, Revenue Recognition . As a result of adoption of ASC 606, certain revenue streams, such as the instant booking revenue, recorded under the consumption model, which was previously recorded upon completion of the traveler stay, is now recognized upon booking. The amount of the recognized transaction price is recorded as revenue, net of the impact of estimated cancellations. TripAdvisor also recorded an adjustment to capitalize certain costs to obtain contracts for existing arrangements as of the implementation date. TripAdvisor expects the adoption of this new revenue standard will not have a material impact, either on an annual or quarterly basis, to its consolidated financial statements on an ongoing basis. Its systems and internal controls were not significantly impacted as a result of the accounting changes and TripAdvisor has made the necessary changes to its accounting policies and internal processes to support the new revenue recognition standard, including the related disclosures. TripAdvisor recognized the cumulative effect of initial application of ASC 606 as an adjustment to the opening balance of retained earnings. TripAdvisor recorded a net increase in opening retained earnings of $4 million as of January 1, 2018 due to the cumulative impact of adoption of the new revenue guidance, resulting in a $1 million increase in TripCo’s opening retained earnings and $3 million increase in TripCo’s noncontrolling interest in equity of subsidiaries as of January 1, 2018. All other accounts were not materially impacted. Revenue Recognition under ASC 606 TripAdvisor generates all of its revenue from contracts with customers. It recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that it expects to receive in exchange for those services. When TripAdvisor acts as an agent in the transaction under ASC 606, it recognizes revenue for only its commission on the arrangement. TripAdvisor determines revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, TripAdvisor satisfies a performance obligation At contract inception, TripAdvisor assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, TripAdvisor considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. TripAdvisor has provided qualitative information about its performance obligations for its principal revenue streams discussed below. There was no significant revenue recognized in the three months ended March 31, 2018 related to performance obligations satisfied in prior periods. TripAdvisor has applied a practical expedient and does not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and TripAdvisor does not have any material unsatisfied performance obligations over one year. The value related to TripAdvisor’s remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. The timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component. TripAdvisor’s customer invoices are generally due 30 days from the time of invoicing. TripAdvisor recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. TripAdvisor has determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were approximately $1 million as of March 31, 2018. These contract costs are amortized on a straight-line basis over the estimated customer life, which is based on historical data. Amortization expense recorded during the three months ended March 31, 2018 was not material. TripAdvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. The recognition of revenue may require the application of judgment related to the determination of the performance obligations, the timing of when the performance obligations are satisfied and other areas. The determination of TripAdvisor’s performance obligations does not require significant judgment given that it generally does not provide multiple services to a customer in a given transaction, and the point in which control is transferred to the customer is readily determinable. In instances where TripAdvisor recognizes revenue over time, it generally has either a subscription service that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of TripAdvisor’s services. When an estimate for cancellations is included in the transaction price, the estimate is based on historical data. The estimate is not material. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by TripAdvisor from a customer, are reported on a net basis, or in other words, excluded from revenue on its consolidated financial statements, which is consistent with prior periods. The application of TripAdvisor’s revenue recognition policies and a description of the principal activities, organized by segment, from which it generates revenue, are presented below. Hotels TripAdvisor-branded Click-based Advertising and Transaction Revenue . TripAdvisor’s largest source of Hotel revenue is generated from click-based advertising on TripAdvisor-branded websites, which is primarily comprised of contextually-relevant booking links to its travel partners’ sites. TripAdvisor’s click-based travel partners are predominantly online travel agencies, or “OTAs,” and direct suppliers in the hotel category. Click-based advertising is generally priced on a cost-per-click, or “CPC,” basis, with payments from advertisers determined by the number of users who click on a link multiplied by the price that partner is willing to pay for that click, or hotel shopper lead. CPC rates that travel partners are willing to pay are determined in a dynamic, competitive auction process, or metasearch auction. TripAdvisor records click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner websites as the performance obligation is fulfilled at that time. Click-based revenue is generally billed to travel partners on a monthly basis consistent with the timing of the service. Transaction revenue is generated from TripAdvisor’s instant booking feature, which enables hotel shoppers to book directly with a travel partner, or the merchant of record, without leaving TripAdvisor’s website. TripAdvisor earns a commission from its travel partner for a user that completes a hotel reservation on TripAdvisor’s website. TripAdvisor’s instant booking revenue includes arrangements where commissions are billable on all instant booking hotel reservations and also includes arrangements where the commission is billable only upon the completion of the traveler’s stay resulting from the reservation. TripAdvisor’s performance obligation in both arrangements is complete at the time of the booking and the commission earned is recognized upon booking, as TripAdvisor has no post-booking service obligations. The amount of revenue recognized for commissions which are billable contingent upon a travelers stay requires an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized at the time of booking for commissions that are billable at the time of stay. TripAdvisor is the agent in these transactions under ASC 606. TripAdvisor-branded Display-based Advertising and Subscription Revenue . Travel partners can promote their brands in a contextually-relevant manner through a variety of display-based advertising placements on TripAdvisor websites. TripAdvisor’s display-based advertising clients are predominately direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations. TripAdvisor also sells display-based advertising to OTAs and other travel related businesses, as well as advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions basis. The performance obligation in TripAdvisor’s display based advertising business is to display a number of advertising impressions on TripAdvisor’s websites and TripAdvisor recognizes revenue for impressions as they are delivered. Services are generally billed monthly. TripAdvisor has applied the practical expedient to measure progress toward completion, as it has the right to invoice the customer in an amount that directly corresponds with the value to the customer of TripAdvisor’s performance to date, which is measured based on impressions delivered. In addition, TripAdvisor offers subscription-based advertising to hotels, B&Bs and other specialty lodging properties. TripAdvisor’s performance obligation is generally to enable subscribers to advertise their business on TripAdvisor’s website, including such information as a website URL, email address and phone number, as well as other information. Subscription advertising is predominantly sold for a flat fee, for a contracted period of time which is predominately one year or less. Subscription advertising services are generally billed in advance of service. Subscription advertising revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. When prepayments are received, TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. Other Hotel Revenue. TripAdvisor’s other hotel revenue primarily includes revenue from non-TripAdvisor-branded websites, such as www.bookingbuddy.com, www.cruisecritic.com, and www.onetime.com, which primarily includes click-based advertising and display-based advertising revenue. The performance obligations and timing of customer payments for these brands and methods of recognizing revenue are generally consistent with click-based advertising or display-based advertising revenue, as described above. Non-Hotel TripAdvisor provides information and services for users to research, book and experience activities and attractions in popular travel destinations both through Viator, its dedicated Experiences offering, and on its TripAdvisor website and applications. TripAdvisor also powers travel activities and experiences booking capabilities to users for affiliate partners, including some of the world’s top airlines, hotel chains and online and offline travel agencies. TripAdvisor works with local tour or travel activities/experiences operators (“the supplier”) to provide users with access to book tours, activities and experiences (“the activity”) in popular destinations worldwide. TripAdvisor generates commissions for each booking transaction facilitated through its online reservation system. TripAdvisor provides post-booking service to the user until the time of the activity, which is the completion of the performance obligation. Revenue is recognized at the time that the activity occurs. TripAdvisor is an agent in the transaction, under ASC 606, for nearly all of these transactions. TripAdvisor generally collects payment from the user at the time of booking that includes both TripAdvisor’s commission revenue and the amount due to the supplier. TripAdvisor’s commission revenue is recorded as deferred revenue until revenue is recognized, and the amount due to the supplier is recorded to deferred merchant payables on the consolidated balance sheet, until payment is made to the supplier after the completion of the activity. To a lesser extent, TripAdvisor earns commissions from third-party merchant partners, who display and promote TripAdvisor’s supplier activities on their websites to generate bookings. In these transactions, where TripAdvisor is not the merchant of record, TripAdvisor generally invoices and receives commissions directly from the third-party merchant partners. TripAdvisor’s performance obligation is to allow the third-party merchant partners to display and promote its supplier activities on their website and TripAdvisor earns a commission when users book and complete an activity. TripAdvisor’s performance obligation is complete and revenue is recognized at the time of the booking, as TripAdvisor has no post-booking obligations. TripAdvisor recognizes this revenue net of an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized for commissions that are billable contingent upon completion of the activity. TripAdvisor is an agent in these transactions, under ASC 606. TripAdvisor also provides information and services for users to research and book restaurants in popular travel destinations through its dedicated restaurant reservations offering, TheFork, and on TripAdvisor’s website and applications. TheFork is an online restaurant booking platform operating on a number of websites (including www.lafourchette.com, www.eltenedor.com, www.iens.nl and www.dimmi.com.au), with a network of restaurant partners located primarily across Europe and Australia. TripAdvisor’s bookable restaurants are available on www.thefork.com and on TripAdvisor-branded websites and mobile applications. TripAdvisor primarily generates transaction fees (or per seated diner fees) that are paid by restaurants for diners seated primarily from bookings through TheFork’s online reservation system. The transaction fee is recognized in revenue after the reservation is fulfilled, or as diners are seated by restaurant customers. Revenue is billed monthly when the transaction fees are payable, which is at the time the diner is seated. To a lesser extent, TripAdvisor also generates subscription fees for access to certain online reservation management services and marketing analytic tools provided by TheFork and TripAdvisor. As the performance obligation is to provide restaurants with access to these services over the subscription period, subscription fee revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. Subscription fees are generally billable in advance of service. When prepayments are received, TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. In addition, TripAdvisor provides information and services for users to research and book vacation and short-term rental properties, including full home rentals, condominiums, villas, beach rentals, cabins and cottages. Rentals generates revenue primarily by offering individual property owners and managers the ability to list their properties on TripAdvisor’s websites and mobile applications thereby connecting homeowners with travelers through a free-to-list, commission-based option or, to a lesser extent, by an annual subscription-based fee structure. These properties are listed on www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, and on TripAdvisor-branded websites and mobile applications. TripAdvisor earns commissions associated with rental transactions through its free-to-list model from both the traveler and the property owner or manager. TripAdvisor provides post-booking service to the traveler and property owners and managers until the time the rental commences, which is the time the performance obligation is completed. Revenue from transaction fees is recognized at the time that the rental commences. TripAdvisor is an agent in these transactions, under ASC 606. TripAdvisor generally collects payment from the traveler at the time of booking that includes TripAdvisor’s commissions, which is recorded as deferred revenue until revenue is recognized, and the amount due to the property owner, which is recorded in deferred merchant payables on the consolidated balance sheet, until payment is made to the property owner after the completion of the rental. Payments for term-based subscription fees related to online advertising services for the listing of rental properties, are generally due in advance. As the performance obligation is the listing service provided to the property owner or manager over the subscription period, revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. Practical Expedients and Exemptions TripAdvisor expenses costs to obtain a contract as incurred, such as sales commissions, when the amortization period would have been one year or less. TripAdvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Impact of Adoption of ASC 606 The impact of this new revenue recognition guidance on TripAdvisor’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2018 was as follows: As Reported - ASC 606 Impact of Accounting under ASC 606 Adjusted - ASC 605 (in millions) Revenue $ 378 $ (4) $ 374 Operating income 23 (4) 19 Earnings (loss) before income taxes 21 (4) 17 Income tax (expense) benefit (16) 1 (15) Net earnings (loss) 5 (3) 2 The impact of the new guidance was not meaningful as of and for the three months ended March 31, 2018 for the unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of cash flows, respectively. Disaggregation of Revenue TripAdvisor disaggregates revenue from contracts with customers into major products/revenue sources. TripAdvisor has determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. A reconciliation of disaggregated revenue to total hotel and non-hotel revenue is also included below. Three months ended Major products/revenue sources: (in millions) Click-based advertising and transaction revenue $ Display-based advertising and subscription revenue Other hotel revenue Total Hotel Revenue (1) Non-Hotel Revenue (1) Total Revenue $ (1) TripAdvisor’s revenue is recognized primarily at a point in time for both Hotel and Non-Hotel revenue. Contract balances The following table provides information about the opening and closing balances of accounts receivables and contract assets from contracts with customers (in millions): March 31, December 31, 2018 2017 Accounts receivable $ Contract assets — Total $ Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that TripAdvisor has transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. Contract liabilities generally include payments received in advance of performance under the contract, and are realized as revenue as the performance obligation to the customer is satisfied, which TripAdvisor presents as deferred revenue on its unaudited consolidated balance sheet. During the three months ended March 31, 2018, $41 million was recognized as revenue which was included in the deferred revenue balance at the beginning of the period. The difference between the opening and closing balances of TripAdvisor’s contract assets and deferred revenue primarily results from the timing differences between TripAdvisor’s performance and the customer’s payment. There were no significant changes in contract assets or liabilities during the three months ended March 31, 2018 related to business combinations, impairments, cumulative catch-up or other material adjustments. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets (right-of-use-assets) and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. The new guidance will classify leases as either finance or operating leases, with classification determining the presentation of expenses and cash flows on the consolidated financial statements. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. TripAdvisor will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases which include, among other things, the computation and disclosure of its weighted average remaining lease term and discount rate, cash paid for amounts included in the measurement of lease liabilities, and supplemental non-cash information on lease liabilities arising from obtaining the right-of-use assets. These disclosures are intended to provide supplemental information to the amounts recorded in the financial statements so that users can better understand the nature of an entity’s leasing activities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted, which will require the recognition and measurement of leases at the beginning of the earliest comparative period presented in the financial statements using a modified retrospective approach. The Company anticipates adopting this new guidance in the first quarter of 2019. TripAdvisor will continue to evaluate the new lease guidance and is in the process of updating accounting policies, accounting position memos, and evaluating its existing population of contracts to ensure all contracts that meet the definition of a lease contract under the new standard are identified. TripAdvisor is also in the process of implementing additional lease software to support its accounting and reporting process, including the new quantitative and qualitative financial disclosure requirements. In addition, TripAdvisor is evaluating the impact of the system implementation and new accounting guidance on its internal controls. TripAdvisor will continue to provide updates on its assessment of the effect that this new lease guidance will have on its consolidated financial statements, disclosures, systems and related internal controls, and will disclose material effects, if any, when known. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock Based Compensation | |
Stock Based Compensation | (3) Stock-Based Compensation TripCo Incentive Plans TripCo has granted to certain of its directors and employees options to purchase shares of TripCo common stock (“Awards”). TripCo measures the cost of employee services received in exchange for an equity classified Award based on the grant-date fair value (“GDFV”) 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). TripCo has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes-Merton model. TripCo estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of TripCo common stock and the implied volatility of publicly traded TripCo options. TripCo uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. Included in the accompanying condensed consolidated statements of operations are the following amounts of stock‑based compensation, the majority of which relates to TripAdvisor as discussed below: Three months ended March 31, 2018 2017 amounts in millions Operating expense $ 12 7 Selling, general and administrative expense 18 13 $ 30 20 Stock-based compensation expense related to TripAdvisor was $29 million and $19 million for the three months ended March 31, 2018 and 2017, respectively. TripCo - Outstanding Awards The following table presents the number and weighted average exercise price (“WAEP”) of the Awards to purchase TripCo common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining contractual 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, 2018 681 $ 14.68 Granted — $ — Exercised — $ — Forfeited/Cancelled (149) $ 14.12 Outstanding at March 31, 2018 532 $ 14.83 3.1 $ — Exercisable at March 31, 2018 423 $ 16.12 2.2 $ — There were no options to purchase shares of Series A common stock granted during the three months ended March 31, 2018. There was no activity during the period related to the outstanding TripCo Series B options. As of March 31, 2018 , the total unrecognized compensation cost related to unvested Awards was approximately $9 million . Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 1.5 years. As of March 31, 2018, TripCo reserved 2.3 million shares of Series A and Series B common stock for issuance under exercise privileges of outstanding stock Awards. TripAdvisor Equity Grant Awards The following table presents the number and WAEP of the Awards to purchase TripAdvisor common stock granted to certain officers, employees and directors of TripAdvisor. Weighted average TripAdvisor remaining Aggregate stock contractual intrinsic options WAEP life value in thousands in years in millions Outstanding at January 1, 2018 6,853 $ 52.78 Granted 611 $ 41.54 Exercised (196) $ 28.21 Cancelled or expired (72) $ 47.80 Outstanding at March 31, 2018 7,196 $ 52.48 6.7 $ 10 Exercisable at March 31, 2018 3,428 $ 54.81 4.7 $ 5 The weighted average GDFV of options granted was $17.60 for the three months ended March 31, 2018. As of March 31, 2018, the total unrecognized compensation cost related to unvested TripAdvisor stock options was approximately $55 million and will be recognized over a weighted average period of approximately 3.0 years. The total intrinsic value of stock options exercised for three months ended March 31, 2018 and 2017 was $3 million and $7 million, respectively. Additionally, during the three months ended March 31, 2018, TripAdvisor granted 2,661 thousand service-based restricted stock units (“RSUs”) and market-based stock units (“MSUs”) under its Amended and Restated 2011 Stock and Annual Incentive Plan. The RSUs’ fair value was measured based on the quoted price of TripAdvisor common stock at the date of grant. As the MSUs provide for vesting based upon TripAdvisor’s total shareholder return, or “TSR,” performance, the potential outcomes of future stock prices and TSR of TripAdvisor and the Nasdaq Composite Total Return Index, was used to calculate the GDFV of these awards. The weighted average GDFV for RSUs and MSUs granted during the three months ended March 31, 2018 was $41.92 per share. As of March 31, 2018, the total unrecognized compensation cost related to TripAdvisor RSUs and MSUs was approximately $312 million and will be recognized over a weighted average period of approximately 3.2 years. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share (EPS) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings (Loss) Per Common Share (EPS) | |
Earnings (Loss) Per Common Share (EPS) | (4) Earnings (Loss) Per Common Share (EPS) Basic earnings (loss) per common share (“EPS”) is computed by dividing net earnings (loss) attributable to TripCo shareholders by the weighted average number of common shares outstanding (“WASO”) 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. Excluded from EPS for the three months ended March 31, 2018 and 2017 are less than a million potential common shares, because their inclusion would be antidilutive. Liberty TripAdvisor Holdings Common Stock Three months ended March 31, 2018 2017 number of shares in millions Basic WASO 75 75 Potentially dilutive shares — — Diluted WASO 75 75 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 3 Months Ended |
Mar. 31, 2018 | |
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: March 31, 2018 December 31, 2017 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 $ 315 315 — 32 23 9 Marketable securities $ 20 — 20 62 — 62 Variable postpaid forward $ 52 — 52 75 — 75 On June 6, 2016, TripCo entered into a variable postpaid forward transaction with a financial institution with respect to 7 million shares of TripAdvisor common stock held by the Company with a forward floor price of $38.90 per share and a forward cap price of $98.96 per share. TripCo borrowed $259 million against the variable postpaid forward on June 23, 2016 (see note 6). The asset associated with this instrument is included in the other assets, at cost, net of accumulated amortization in the accompanying condensed consolidated balance sheets. The fair value of Level 2 cash equivalents and marketable securities were obtained from pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Marketable securities are included in other current assets and other assets in the accompanying condensed consolidated balance sheets. The fair value of Level 2 derivative assets were derived from a Black-Scholes-Merton model using observable market data as the significant inputs. Other Financial Instruments Other financial instruments not measured at fair value on a recurring basis include trade receivables, trade payables, accrued and other current liabilities, current portion of debt and long-term debt. With the exception of debt, the carrying amount approximates fair value due to the short maturity of these instruments as reported on our condensed consolidated balance sheets. The carrying value of our debt bears interest at a variable rate and therefore is also considered to approximate fair value. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt | |
Debt | (6) Debt Outstanding debt at March 31, 2018 and December 31, 2017 is summarized as follows: March 31, December 31, 2018 2017 amounts in millions TripAdvisor Credit Facilities — 230 TripAdvisor Chinese Credit facilities 7 7 TripCo margin loans 212 210 TripCo variable postpaid forward 265 264 Total consolidated TripCo debt $ 484 711 Debt classified as current (7) (7) Total long-term debt $ 477 704 TripAdvisor Credit Facilities TripAdvisor is party to a five year credit agreement, with a group of lenders, which, among other things, provides for a $1.2 billion unsecured revolving credit facility (the “2015 Credit Facility”) with a maturity date of May 12, 2022. Borrowings under the 2015 Credit Facility generally bear interest, at TripAdvisor’s option, at a rate per annum equal to either (i) the Eurocurrency Borrowing rate, or the adjusted LIBOR for the interest period in effect for such borrowing; plus an applicable margin ranging from 1.25% to 2.00% (“Eurocurrency Spread”), based on TripAdvisor’s leverage ratio; or (ii) the Alternate Base Rate (“ABR”) Borrowing, which is the greatest of (a) the Prime Rate in effect on such day, (b) the New York Fed Bank Rate in effect on such day plus 1/2 of 1.00% per annum and (c) the Adjusted LIBOR (or LIBOR multiplied by the Statutory Reserve Rate) for an interest period of one month plus 1.00%; in addition to an applicable margin ranging from 0.25% to 1.00%, based on TripAdvisor’s leverage ratio. TripAdvisor may borrow from the 2015 Credit Facility in U.S. dollars, Euros and British pound sterling. During the three months ended March 31, 2018, TripAdvisor borrowed an additional $5 million and repaid $235 million of its outstanding borrowings on the 2015 Credit Facility. These net repayments were primarily made from a one time cash repatriation of $325 million of foreign earnings to the United States during the three months ended March 31, 2018. As of March 31, 2018, there were no outstanding borrowings under the 2015 Credit Facility. TripAdvisor is also required to pay a quarterly commitment fee, at an applicable rate ranging from 0.15% to 0.30%, on the daily unused portion of the 2015 Credit Facility for each fiscal quarter and additional fees in connection with the issuance of letters of credit. As of March 31, 2018, TripAdvisor’s unused revolver capacity was subject to a commitment fee of 0.15%, given TripAdvisor’s leverage ratio. The 2015 Credit Facility includes $15 million of borrowing capacity available for letters of credit and $40 million for Swing Line borrowings on same-day notice. As of March 31, 2018, TripAdvisor had issued $3 million of outstanding letters of credit under the 2015 Credit Facility. There is no specific repayment date prior to the maturity date for borrowings under the 2015 Credit Facility. 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. Additionally, TripAdvisor believes that the likelihood of the lender exercising any subjective acceleration rights, which would permit the lenders to accelerate repayment of any outstanding borrowings, is remote. As such, borrowings under this facility are classified as long-term debt. 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 its 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 is party to an uncommitted facility agreement which provides for a $73 million unsecured revolving credit facility (the “2016 Credit Facility,” and together with the 2015 Credit Facility, the “TripAdvisor Credit Facilities”) with no specific expiration date. The 2016 Credit Facility is available at the lender’s discretion and can be canceled at any time. Repayment terms for borrowings under the 2016 Credit Facility are generally one to six month periods or such other periods as the parties may mutually agree and bear interest at LIBOR plus 112.5 basis points. TripAdvisor may borrow from the 2016 Credit Facility in U.S. dollars only and it may voluntarily repay any outstanding borrowing at any time without premium or penalty. There are no specific financial or incurrence covenants. TripAdvisor repaid all outstanding borrowings on the 2016 Credit Facility of $73 million during the three months ended March 31, 2017. As of March 31, 2018 and December 31, 2017, there were no outstanding borrowings under the 2016 Credit Facility. TripAdvisor Chinese Credit Facilities In addition to borrowings under the Trip Advisor Credit Facilities, TripAdvisor maintains two credit facilities in China (jointly, the “TripAdvisor Chinese Credit Facilities”). TripAdvisor’s Chinese subsidiary is party to a $30 million, one-year revolving credit facility with Bank of America (the “Chinese Credit Facility—BOA”) that is currently subject to review on a periodic basis with no specific expiration period. Borrowings under the Chinese Credit Facility—BOA generally bear interest at a rate based on the People’s Bank of China benchmark, including certain adjustments which may be made in accordance with market conditions at the time of borrowing. As of March 31, 2018 and December 31, 2017, there were no outstanding borrowings under the Chinese Credit Facility—BOA. In addition, TripAdvisor’s Chinese subsidiary is party to a RMB 70,000,000 (approximately $11 million) one-year revolving credit facility with J.P. Morgan Chase Bank (the “Chinese Credit Facility—JPM”). Borrowings under the Chinese Credit Facility—JPM generally bear interest at a rate based on the People’s Bank of China benchmark, including certain adjustments which may be made in accordance with market conditions at the time of borrowing. As of both March 31, 2018 and December 31, 2017, TripAdvisor had $7 million of outstanding borrowings from the Chinese Credit Facility—JPM at a weighted average rate of 4.98% and 5.00%, respectively. TripCo Margin Loans and Variable Postpaid Forward On August 21, 2014, a wholly owned subsidiary of TripCo (“TripSPV”) entered into two margin loan agreements, which aggregated total borrowings of $400 million. Interest on the margin loans accrues at a rate of 3.65% plus LIBOR for six months and 3.25% plus LIBOR thereafter. Interest on the margin loans was paid in kind and added to the principal amount on the loans. In connection with the variable postpaid forward transaction entered into on June 6, 2016, as described in note 5, TripCo borrowed $259 million against the variable postpaid forward on June 23, 2016. The term of the forward is four years. At maturity, the accreted loan amount due is approximately $272 million. The proceeds from the forward were used to repay $200 million in principal and $29 million of paid in kind interest on the margin loans with the remainder being used for general corporate purposes. On June 23, 2016, TripCo amended the terms of the margin loan agreements with respect to the remaining borrowings of $200 million. Common Stock and Class B Common Stock of TripAdvisor were pledged as collateral pursuant to these agreements. Each agreement contains language that indicates that the Company, 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 $150 million if at any time the closing price per share of TripAdvisor common stock were to fall below a certain minimum value. Pursuant to the amendments, interest on the margin loans accrued at a rate of 2.0% plus LIBOR. On November 7, 2017, pursuant to another amendment to the margin loan agreements, the interest rate on the margin loans increased to 2.4% plus LIBOR per year. The interest can be paid in kind or cash at the election of TripCo. The Company expects that interest on the loan will be paid in kind and added to the principal amount on the loan. The term of the loan is three years and the maturity date is June 21, 2019. During the three months ended March 31, 2018 and 2017, TripCo recorded $2 million and $1 million of non-cash interest related to the amended margin loans and variable postpaid forward, respectively. As of March 31, 2018, the values of TripAdvisor’s shares pledged as collateral pursuant to the margin loan agreements and variable postpaid forward, 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 March 31, 2018 March 31, 2018 amounts in millions Common Stock 18.2 $ 743 Class B Common Stock 12.8 $ 523 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. Debt Covenants As of March 31, 2018, each of the Company and TripAdvisor was in compliance with its respective debt covenants. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | (7) Commitments and Contingencies Litigation In the ordinary course of business, the Company and its subsidiaries are parties to legal proceedings and claims 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 condensed consolidated financial statements. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Segment Information | (8) Segment Information TripCo, through its ownership interests in subsidiaries and other companies, is primarily engaged in the online 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, 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. For the three months ended March 31, 2018, TripCo has identified the following consolidated company as its reportable segment: · TripAdvisor - an online travel research company, empowering users to plan and maximize their travel experience. TripAdvisor’s accounting policies are the same as those described in the Company’s Summary of Significant Accounting Policies included in the Annual Report on Form 10-K for the year ended December 31, 2017. Performance Measures Three months ended March 31, 2018 2017 Adjusted Adjusted Revenue OIBDA Revenue OIBDA amounts in millions TripAdvisor $ 378 80 372 73 Corporate and other — (2) 6 (4) Consolidated TripCo $ 378 78 378 69 Other Information March 31, 2018 Total Capital assets expenditures amounts in millions TripAdvisor $ 5,319 15 Corporate and other 73 — Consolidated TripCo $ 5,392 15 The following table provides a reconciliation of Consolidated segment Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: Three months ended March 31, 2018 2017 amounts in millions Consolidated segment Adjusted OIBDA $ 78 69 Stock-based compensation (30) (20) Depreciation and amortization (39) (56) Operating income (loss) 9 (7) Interest expense (6) (5) Realized and unrealized gain (losses) on financial instruments, net (23) 6 Other, net 1 1 Earnings (loss) before income taxes $ (19) (5) |
Recent Accounting Pronounceme16
Recent Accounting Pronouncement (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (the “FASB”) issued new accounting guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications, which will reduce diversity in practice. Under the new guidance, an entity will not apply modification accounting to a share-based payment award if the award’s fair value (or calculated value or intrinsic value, if those measurement methods are used), the award’s vesting conditions, and the award’s classification as an equity or liability instrument are the same immediately before and after the change. The guidance also states that an entity is not required to estimate the value of the award immediately before and after the change if the change does not affect any of the inputs to the model used to value the award. The Company adopted this guidance prospectively in the first quarter of 2018. The Company believes the new guidance will likely result in fewer changes to the terms of an award being accounted for as modifications. In August and November 2016, the FASB issued new accounting standards which add and clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows, and add guidance on the presentation of restricted cash in the statement of cash flows, respectively. This new guidance requires entities to show changes in cash, cash equivalents and restricted cash on a combined basis in the statement of cash flows. In addition, this accounting guidance requires a reconciliation of the total cash, cash equivalent and restricted cash in the statement of cash flows to the related captions in the balance sheet if cash, cash equivalents and restricted cash are presented in more than one line item in the balance sheet. The Company adopted this guidance effective January 1, 2018 and applied it retrospectively to all prior periods presented in the financial statements as required under the new guidance. The Company does not currently have material amounts described as restricted cash; however, the Company’s consolidated statement of cash flows for the year ended December 31, 2016 has been recast to present $5 million of restricted cash as beginning of period cash and cash equivalents and $4 million of restricted cash as end of period cash and cash equivalents at March 31, 2017. These amounts were included in other current assets as of December 31, 2016 and March 31, 2017. In October 2016, the FASB issued new accounting guidance on income tax accounting associated with intra-entity transfers of assets other than inventory. This accounting update, which is part of the FASB's simplification initiative, is intended to reduce diversity in practice and the complexity of tax accounting, particularly for those transfers involving intellectual property. This new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The Company adopted this new guidance in the first quarter of 2018 on a modified retrospective basis. The adoption of this guidance did not have a material impact on the Company’s financial statements. In May 2014, the FASB issued new accounting guidance on revenue from contracts with customers, or ASC 606, Revenue from Contracts with Customers (“ASC 606”), which replaced numerous requirements in GAAP, and provides companies with a single model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In addition, the FASB has also issued several amendments to the standard, which clarifies certain aspects of the guidance, including principal versus agent considerations and identifying performance obligations. In the first quarter of 2018, the Company adopted ASC 606, under the modified retrospective method for all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the previous accounting policies under the historical revenue guidance, or ASC 605, Revenue Recognition . As a result of adoption of ASC 606, certain revenue streams, such as the instant booking revenue, recorded under the consumption model, which was previously recorded upon completion of the traveler stay, is now recognized upon booking. The amount of the recognized transaction price is recorded as revenue, net of the impact of estimated cancellations. TripAdvisor also recorded an adjustment to capitalize certain costs to obtain contracts for existing arrangements as of the implementation date. TripAdvisor expects the adoption of this new revenue standard will not have a material impact, either on an annual or quarterly basis, to its consolidated financial statements on an ongoing basis. Its systems and internal controls were not significantly impacted as a result of the accounting changes and TripAdvisor has made the necessary changes to its accounting policies and internal processes to support the new revenue recognition standard, including the related disclosures. TripAdvisor recognized the cumulative effect of initial application of ASC 606 as an adjustment to the opening balance of retained earnings. TripAdvisor recorded a net increase in opening retained earnings of $4 million as of January 1, 2018 due to the cumulative impact of adoption of the new revenue guidance, resulting in a $1 million increase in TripCo’s opening retained earnings and $3 million increase in TripCo’s noncontrolling interest in equity of subsidiaries as of January 1, 2018. All other accounts were not materially impacted. Revenue Recognition under ASC 606 TripAdvisor generates all of its revenue from contracts with customers. It recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that it expects to receive in exchange for those services. When TripAdvisor acts as an agent in the transaction under ASC 606, it recognizes revenue for only its commission on the arrangement. TripAdvisor determines revenue recognition through the following steps: (1) Identification of the contract, or contracts, with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, TripAdvisor satisfies a performance obligation At contract inception, TripAdvisor assesses the services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, TripAdvisor considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. TripAdvisor has provided qualitative information about its performance obligations for its principal revenue streams discussed below. There was no significant revenue recognized in the three months ended March 31, 2018 related to performance obligations satisfied in prior periods. TripAdvisor has applied a practical expedient and does not disclose the value of unsatisfied performance obligations that have an original expected duration of less than one year, and TripAdvisor does not have any material unsatisfied performance obligations over one year. The value related to TripAdvisor’s remaining or partially satisfied performance obligations relates to subscription services that are satisfied over time or services that are recognized at a point in time, but not yet achieved. The timing of services, invoicing and payments are discussed in more detail below and do not include a significant financing component. TripAdvisor’s customer invoices are generally due 30 days from the time of invoicing. TripAdvisor recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. TripAdvisor has determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were approximately $1 million as of March 31, 2018. These contract costs are amortized on a straight-line basis over the estimated customer life, which is based on historical data. Amortization expense recorded during the three months ended March 31, 2018 was not material. TripAdvisor assesses such assets for impairment when events or circumstances indicate that the carrying amount may not be recoverable. The recognition of revenue may require the application of judgment related to the determination of the performance obligations, the timing of when the performance obligations are satisfied and other areas. The determination of TripAdvisor’s performance obligations does not require significant judgment given that it generally does not provide multiple services to a customer in a given transaction, and the point in which control is transferred to the customer is readily determinable. In instances where TripAdvisor recognizes revenue over time, it generally has either a subscription service that is recognized over time on a straight-line basis using the time-elapsed output method, or based on other output measures that provide a faithful depiction of the transfer of TripAdvisor’s services. When an estimate for cancellations is included in the transaction price, the estimate is based on historical data. The estimate is not material. Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue–producing transaction, that are collected by TripAdvisor from a customer, are reported on a net basis, or in other words, excluded from revenue on its consolidated financial statements, which is consistent with prior periods. The application of TripAdvisor’s revenue recognition policies and a description of the principal activities, organized by segment, from which it generates revenue, are presented below. Hotels TripAdvisor-branded Click-based Advertising and Transaction Revenue . TripAdvisor’s largest source of Hotel revenue is generated from click-based advertising on TripAdvisor-branded websites, which is primarily comprised of contextually-relevant booking links to its travel partners’ sites. TripAdvisor’s click-based travel partners are predominantly online travel agencies, or “OTAs,” and direct suppliers in the hotel category. Click-based advertising is generally priced on a cost-per-click, or “CPC,” basis, with payments from advertisers determined by the number of users who click on a link multiplied by the price that partner is willing to pay for that click, or hotel shopper lead. CPC rates that travel partners are willing to pay are determined in a dynamic, competitive auction process, or metasearch auction. TripAdvisor records click-based advertising revenue as the click occurs and traveler leads are sent to the travel partner websites as the performance obligation is fulfilled at that time. Click-based revenue is generally billed to travel partners on a monthly basis consistent with the timing of the service. Transaction revenue is generated from TripAdvisor’s instant booking feature, which enables hotel shoppers to book directly with a travel partner, or the merchant of record, without leaving TripAdvisor’s website. TripAdvisor earns a commission from its travel partner for a user that completes a hotel reservation on TripAdvisor’s website. TripAdvisor’s instant booking revenue includes arrangements where commissions are billable on all instant booking hotel reservations and also includes arrangements where the commission is billable only upon the completion of the traveler’s stay resulting from the reservation. TripAdvisor’s performance obligation in both arrangements is complete at the time of the booking and the commission earned is recognized upon booking, as TripAdvisor has no post-booking service obligations. The amount of revenue recognized for commissions which are billable contingent upon a travelers stay requires an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized at the time of booking for commissions that are billable at the time of stay. TripAdvisor is the agent in these transactions under ASC 606. TripAdvisor-branded Display-based Advertising and Subscription Revenue . Travel partners can promote their brands in a contextually-relevant manner through a variety of display-based advertising placements on TripAdvisor websites. TripAdvisor’s display-based advertising clients are predominately direct suppliers of hotels, airlines and cruises, as well as destination marketing organizations. TripAdvisor also sells display-based advertising to OTAs and other travel related businesses, as well as advertisers from non-travel categories. Display-based advertising is sold predominantly on a cost per thousand impressions basis. The performance obligation in TripAdvisor’s display based advertising business is to display a number of advertising impressions on TripAdvisor’s websites and TripAdvisor recognizes revenue for impressions as they are delivered. Services are generally billed monthly. TripAdvisor has applied the practical expedient to measure progress toward completion, as it has the right to invoice the customer in an amount that directly corresponds with the value to the customer of TripAdvisor’s performance to date, which is measured based on impressions delivered. In addition, TripAdvisor offers subscription-based advertising to hotels, B&Bs and other specialty lodging properties. TripAdvisor’s performance obligation is generally to enable subscribers to advertise their business on TripAdvisor’s website, including such information as a website URL, email address and phone number, as well as other information. Subscription advertising is predominantly sold for a flat fee, for a contracted period of time which is predominately one year or less. Subscription advertising services are generally billed in advance of service. Subscription advertising revenue is recognized on a straight-line basis over the period of the subscription service as efforts are expended evenly throughout the contract period. When prepayments are received, TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. Other Hotel Revenue. TripAdvisor’s other hotel revenue primarily includes revenue from non-TripAdvisor-branded websites, such as www.bookingbuddy.com, www.cruisecritic.com, and www.onetime.com, which primarily includes click-based advertising and display-based advertising revenue. The performance obligations and timing of customer payments for these brands and methods of recognizing revenue are generally consistent with click-based advertising or display-based advertising revenue, as described above. Non-Hotel TripAdvisor provides information and services for users to research, book and experience activities and attractions in popular travel destinations both through Viator, its dedicated Experiences offering, and on its TripAdvisor website and applications. TripAdvisor also powers travel activities and experiences booking capabilities to users for affiliate partners, including some of the world’s top airlines, hotel chains and online and offline travel agencies. TripAdvisor works with local tour or travel activities/experiences operators (“the supplier”) to provide users with access to book tours, activities and experiences (“the activity”) in popular destinations worldwide. TripAdvisor generates commissions for each booking transaction facilitated through its online reservation system. TripAdvisor provides post-booking service to the user until the time of the activity, which is the completion of the performance obligation. Revenue is recognized at the time that the activity occurs. TripAdvisor is an agent in the transaction, under ASC 606, for nearly all of these transactions. TripAdvisor generally collects payment from the user at the time of booking that includes both TripAdvisor’s commission revenue and the amount due to the supplier. TripAdvisor’s commission revenue is recorded as deferred revenue until revenue is recognized, and the amount due to the supplier is recorded to deferred merchant payables on the consolidated balance sheet, until payment is made to the supplier after the completion of the activity. To a lesser extent, TripAdvisor earns commissions from third-party merchant partners, who display and promote TripAdvisor’s supplier activities on their websites to generate bookings. In these transactions, where TripAdvisor is not the merchant of record, TripAdvisor generally invoices and receives commissions directly from the third-party merchant partners. TripAdvisor’s performance obligation is to allow the third-party merchant partners to display and promote its supplier activities on their website and TripAdvisor earns a commission when users book and complete an activity. TripAdvisor’s performance obligation is complete and revenue is recognized at the time of the booking, as TripAdvisor has no post-booking obligations. TripAdvisor recognizes this revenue net of an estimate of the impact of cancellations using historical cancellation rates. Contract assets are recognized for commissions that are billable contingent upon completion of the activity. TripAdvisor is an agent in these transactions, under ASC 606. TripAdvisor also provides information and services for users to research and book restaurants in popular travel destinations through its dedicated restaurant reservations offering, TheFork, and on TripAdvisor’s website and applications. TheFork is an online restaurant booking platform operating on a number of websites (including www.lafourchette.com, www.eltenedor.com, www.iens.nl and www.dimmi.com.au), with a network of restaurant partners located primarily across Europe and Australia. TripAdvisor’s bookable restaurants are available on www.thefork.com and on TripAdvisor-branded websites and mobile applications. TripAdvisor primarily generates transaction fees (or per seated diner fees) that are paid by restaurants for diners seated primarily from bookings through TheFork’s online reservation system. The transaction fee is recognized in revenue after the reservation is fulfilled, or as diners are seated by restaurant customers. Revenue is billed monthly when the transaction fees are payable, which is at the time the diner is seated. To a lesser extent, TripAdvisor also generates subscription fees for access to certain online reservation management services and marketing analytic tools provided by TheFork and TripAdvisor. As the performance obligation is to provide restaurants with access to these services over the subscription period, subscription fee revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. Subscription fees are generally billable in advance of service. When prepayments are received, TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. In addition, TripAdvisor provides information and services for users to research and book vacation and short-term rental properties, including full home rentals, condominiums, villas, beach rentals, cabins and cottages. Rentals generates revenue primarily by offering individual property owners and managers the ability to list their properties on TripAdvisor’s websites and mobile applications thereby connecting homeowners with travelers through a free-to-list, commission-based option or, to a lesser extent, by an annual subscription-based fee structure. These properties are listed on www.flipkey.com, www.holidaylettings.co.uk, www.housetrip.com, www.niumba.com, and www.vacationhomerentals.com, and on TripAdvisor-branded websites and mobile applications. TripAdvisor earns commissions associated with rental transactions through its free-to-list model from both the traveler and the property owner or manager. TripAdvisor provides post-booking service to the traveler and property owners and managers until the time the rental commences, which is the time the performance obligation is completed. Revenue from transaction fees is recognized at the time that the rental commences. TripAdvisor is an agent in these transactions, under ASC 606. TripAdvisor generally collects payment from the traveler at the time of booking that includes TripAdvisor’s commissions, which is recorded as deferred revenue until revenue is recognized, and the amount due to the property owner, which is recorded in deferred merchant payables on the consolidated balance sheet, until payment is made to the property owner after the completion of the rental. Payments for term-based subscription fees related to online advertising services for the listing of rental properties, are generally due in advance. As the performance obligation is the listing service provided to the property owner or manager over the subscription period, revenue is recognized over the period of the subscription service on a straight-line basis as efforts are expended evenly throughout the contract period. TripAdvisor recognizes deferred revenue for the amount of prepayment in excess of revenue recognized until the performance obligation is satisfied. Practical Expedients and Exemptions TripAdvisor expenses costs to obtain a contract as incurred, such as sales commissions, when the amortization period would have been one year or less. TripAdvisor does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. Impact of Adoption of ASC 606 The impact of this new revenue recognition guidance on TripAdvisor’s unaudited condensed consolidated statement of operations for the three months ended March 31, 2018 was as follows: As Reported - ASC 606 Impact of Accounting under ASC 606 Adjusted - ASC 605 (in millions) Revenue $ 378 $ (4) $ 374 Operating income 23 (4) 19 Earnings (loss) before income taxes 21 (4) 17 Income tax (expense) benefit (16) 1 (15) Net earnings (loss) 5 (3) 2 The impact of the new guidance was not meaningful as of and for the three months ended March 31, 2018 for the unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of cash flows, respectively. Disaggregation of Revenue TripAdvisor disaggregates revenue from contracts with customers into major products/revenue sources. TripAdvisor has determined that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. A reconciliation of disaggregated revenue to total hotel and non-hotel revenue is also included below. Three months ended Major products/revenue sources: (in millions) Click-based advertising and transaction revenue $ Display-based advertising and subscription revenue Other hotel revenue Total Hotel Revenue (1) Non-Hotel Revenue (1) Total Revenue $ (1) TripAdvisor’s revenue is recognized primarily at a point in time for both Hotel and Non-Hotel revenue. Contract balances The following table provides information about the opening and closing balances of accounts receivables and contract assets from contracts with customers (in millions): March 31, December 31, 2018 2017 Accounts receivable $ Contract assets — Total $ Accounts receivable are recognized when the right to consideration becomes unconditional. Contract assets are rights to consideration in exchange for services that TripAdvisor has transferred to a customer when that right is conditional on something other than the passage of time, such as commission payments that are contingent upon the completion of the service by the principal in the transaction. Contract liabilities generally include payments received in advance of performance under the contract, and are realized as revenue as the performance obligation to the customer is satisfied, which TripAdvisor presents as deferred revenue on its unaudited consolidated balance sheet. During the three months ended March 31, 2018, $41 million was recognized as revenue which was included in the deferred revenue balance at the beginning of the period. The difference between the opening and closing balances of TripAdvisor’s contract assets and deferred revenue primarily results from the timing differences between TripAdvisor’s performance and the customer’s payment. There were no significant changes in contract assets or liabilities during the three months ended March 31, 2018 related to business combinations, impairments, cumulative catch-up or other material adjustments. Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued new guidance related to accounting for leases. The new standard requires the recognition of assets (right-of-use-assets) and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. The new guidance will classify leases as either finance or operating leases, with classification determining the presentation of expenses and cash flows on the consolidated financial statements. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. TripAdvisor will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases which include, among other things, the computation and disclosure of its weighted average remaining lease term and discount rate, cash paid for amounts included in the measurement of lease liabilities, and supplemental non-cash information on lease liabilities arising from obtaining the right-of-use assets. These disclosures are intended to provide supplemental information to the amounts recorded in the financial statements so that users can better understand the nature of an entity’s leasing activities. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted, which will require the recognition and measurement of leases at the beginning of the earliest comparative period presented in the financial statements using a modified retrospective approach. The Company anticipates adopting this new guidance in the first quarter of 2019. TripAdvisor will continue to evaluate the new lease guidance and is in the process of updating accounting policies, accounting position memos, and evaluating its existing population of contracts to ensure all contracts that meet the definition of a lease contract under the new standard are identified. TripAdvisor is also in the process of implementing additional lease software to support its accounting and reporting process, including the new quantitative and qualitative financial disclosure requirements. In addition, TripAdvisor is evaluating the impact of the system implementation and new accounting guidance on its internal controls. TripAdvisor will continue to provide updates on its assessment of the effect that this new lease guidance will have on its consolidated financial statements, disclosures, systems and related internal controls, and will disclose material effects, if any, when known. |
Recent Accounting Pronounceme17
Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of disaggregation of revenue | Three months ended Major products/revenue sources: (in millions) Click-based advertising and transaction revenue $ Display-based advertising and subscription revenue Other hotel revenue Total Hotel Revenue (1) Non-Hotel Revenue (1) Total Revenue $ (1) TripAdvisor’s revenue is recognized primarily at a point in time for both Hotel and Non-Hotel revenue. |
Schedule of contract balances | The following table provides information about the opening and closing balances of accounts receivables and contract assets from contracts with customers (in millions): March 31, December 31, 2018 2017 Accounts receivable $ Contract assets — Total $ |
ASU 2014-09 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Schedule of impact of adoption of ASC 606 | As Reported - ASC 606 Impact of Accounting under ASC 606 Adjusted - ASC 605 (in millions) Revenue $ 378 $ (4) $ 374 Operating income 23 (4) 19 Earnings (loss) before income taxes 21 (4) 17 Income tax (expense) benefit (16) 1 (15) Net earnings (loss) 5 (3) 2 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of stock-based compensation expense | Three months ended March 31, 2018 2017 amounts in millions Operating expense $ 12 7 Selling, general and administrative expense 18 13 $ 30 20 |
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, 2018 681 $ 14.68 Granted — $ — Exercised — $ — Forfeited/Cancelled (149) $ 14.12 Outstanding at March 31, 2018 532 $ 14.83 3.1 $ — Exercisable at March 31, 2018 423 $ 16.12 2.2 $ — |
Trip Advisor | |
Schedule of stock-based compensation activity | Weighted average TripAdvisor remaining Aggregate stock contractual intrinsic options WAEP life value in thousands in years in millions Outstanding at January 1, 2018 6,853 $ 52.78 Granted 611 $ 41.54 Exercised (196) $ 28.21 Cancelled or expired (72) $ 47.80 Outstanding at March 31, 2018 7,196 $ 52.48 6.7 $ 10 Exercisable at March 31, 2018 3,428 $ 54.81 4.7 $ 5 |
Earnings (Loss) Per Common Sh19
Earnings (Loss) Per Common Share (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings (Loss) Per Common Share (EPS) | |
Reconciliation of Basic and Diluted Weighted Average Shares | Liberty TripAdvisor Holdings Common Stock Three months ended March 31, 2018 2017 number of shares in millions Basic WASO 75 75 Potentially dilutive shares — — Diluted WASO 75 75 |
Assets and Liabilities Measur20
Assets and Liabilities Measured at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | March 31, 2018 December 31, 2017 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 $ 315 315 — 32 23 9 Marketable securities $ 20 — 20 62 — 62 Variable postpaid forward $ 52 — 52 75 — 75 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Schedule of outstanding debt | March 31, December 31, 2018 2017 amounts in millions TripAdvisor Credit Facilities — 230 TripAdvisor Chinese Credit facilities 7 7 TripCo margin loans 212 210 TripCo variable postpaid forward 265 264 Total consolidated TripCo debt $ 484 711 Debt classified as current (7) (7) Total long-term debt $ 477 704 |
Trip Advisor | |
Value of shares pledged as collateral | Number of Shares Pledged as Collateral as of Share value as of Pledged Collateral March 31, 2018 March 31, 2018 amounts in millions Common Stock 18.2 $ 743 Class B Common Stock 12.8 $ 523 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Information | |
Schedule of performance measures | Three months ended March 31, 2018 2017 Adjusted Adjusted Revenue OIBDA Revenue OIBDA amounts in millions TripAdvisor $ 378 80 372 73 Corporate and other — (2) 6 (4) Consolidated TripCo $ 378 78 378 69 |
Schedule of other information | March 31, 2018 Total Capital assets expenditures amounts in millions TripAdvisor $ 5,319 15 Corporate and other 73 — Consolidated TripCo $ 5,392 15 |
Reconciliation of segment Adjusted OIBDA to earnings (loss) before income taxes | Three months ended March 31, 2018 2017 amounts in millions Consolidated segment Adjusted OIBDA $ 78 69 Stock-based compensation (30) (20) Depreciation and amortization (39) (56) Operating income (loss) 9 (7) Interest expense (6) (5) Realized and unrealized gain (losses) on financial instruments, net (23) 6 Other, net 1 1 Earnings (loss) before income taxes $ (19) (5) |
Basis of Presentation (Details)
Basis of Presentation (Details) - Buy Seasons - Disposed of by Sale $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Group Revenue | $ 6 |
Disposal Group Net Earnings Loss | $ (1) |
Basis of Presentation - Spin Of
Basis of Presentation - Spin Off of TripCo from Liberty (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Tax Act transition tax adjustment | $ 5 | |
Liberty | ||
Related Party Transaction, Amounts of Transaction | $ 1 | $ 1 |
Recent Accounting Pronounceme25
Recent Accounting Pronouncements - Recasting Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash, cash equivalents and restricted cash | $ 656 | $ 695 | $ 771 | $ 659 |
ASU 2016-18 | Restatement Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash, cash equivalents and restricted cash | $ 4 | $ 5 |
Recent Accounting Pronounceme26
Recent Accounting Pronouncements - Impact of Adoption of ASC 606 (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings | $ 166 | $ 196 | ||
Noncontrolling interests in equity of subsidiaries | 3,361 | $ 3,329 | ||
Operating income | 9 | $ (7) | ||
Earnings (loss) before income taxes | (19) | (5) | ||
Income tax (expense) benefit | (16) | (4) | ||
Net earnings (loss) | $ (35) | $ (9) | ||
Impact of Accounting ASC 606 | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings | $ 1 | |||
Noncontrolling interests in equity of subsidiaries | 3 | |||
Trip Advisor | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Customer invoices due | 30 days | |||
Capitalized contract costs | $ 1 | |||
Maximum subscription advertising service contact period | 1 year | |||
Revenue | $ 378 | |||
Operating income | 23 | |||
Earnings (loss) before income taxes | 21 | |||
Income tax (expense) benefit | (16) | |||
Net earnings (loss) | $ 5 | |||
Trip Advisor | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Practical expedient, incremental costs | true | |||
Practical expedient, remaining performance obligation | true | |||
Trip Advisor | Impact of Accounting ASC 606 | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings | $ 4 | |||
Revenue | $ (4) | |||
Operating income | (4) | |||
Earnings (loss) before income taxes | (4) | |||
Income tax (expense) benefit | 1 | |||
Net earnings (loss) | (3) | |||
Trip Advisor | Adjusted ASC 605 | ASU 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 374 | |||
Operating income | 19 | |||
Earnings (loss) before income taxes | 17 | |||
Income tax (expense) benefit | (15) | |||
Net earnings (loss) | $ 2 |
Recent Accounting Pronounceme27
Recent Accounting Pronouncements - Disaggregation of Revenue (Details) - Trip Advisor $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 378 |
Hotel | |
Disaggregation of Revenue [Line Items] | |
Revenue | 299 |
Click-based Advertising and Transaction Revenue | |
Disaggregation of Revenue [Line Items] | |
Revenue | 189 |
Display-based Advertising and Subscription Revenue | |
Disaggregation of Revenue [Line Items] | |
Revenue | 71 |
Other Hotel Revenue | |
Disaggregation of Revenue [Line Items] | |
Revenue | 39 |
Non-Hotel | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 79 |
Recent Accounting Pronounceme28
Recent Accounting Pronouncements - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Recent Accounting Pronouncements | ||
Accounts Receivable | $ 269 | $ 230 |
Contract assets | 12 | |
Total | 281 | $ 230 |
Contract with customer revenue recognized | $ 41 |
Stock Based Compensation - Trip
Stock Based Compensation - TripCo Incentive Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation | $ 30 | $ 20 |
Operating expense | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation | 12 | 7 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation | 18 | 13 |
Trip Advisor | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation | $ 29 | $ 19 |
Stock Based Compensation - Tr30
Stock Based Compensation - TripCo Outstanding Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation | ||
Dividend rate | 0.00% | |
Liberty Incentive Plans | Series A | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options outstanding | 681,000 | |
Granted | 0 | |
Cancelled or expired | (149,000) | |
Options outstanding | 532,000 | |
Options exercisable | 423,000 | |
WAEP | ||
Weighted average exercise price, options outstanding (in dollars per share) | $ 14.68 | |
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 14.12 | |
Weighted average exercise price, options outstanding (in dollars per share) | 14.83 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 16.12 | |
Weighted average remaining contractual term outstanding | 3 years 1 month 6 days | |
Weighted average remaining contractual term exercisable | 2 years 2 months 12 days | |
2014 Plan | ||
Additional disclosures | ||
Unvested value not yet recognized | $ 9 | |
Weighted average period the unrecognized compensation cost will be recognized | 1 year 6 months | |
Common Stock, Capital Shares Reserved for Future Issuance | 2,300,000 | |
Stock Options | 2011 Plan | Trip Advisor | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options outstanding | 6,853,000 | |
Granted | 611,000 | |
Exercised | (196,000) | |
Cancelled or expired | (72,000) | |
Options outstanding | 7,196,000 | |
Options exercisable | 3,428,000 | |
WAEP | ||
Weighted average exercise price, options outstanding (in dollars per share) | $ 52.78 | |
Weighted average exercise price, options granted (in dollars per share) | 41.54 | |
Weighted average exercise price, options exercised (in dollars per share) | 28.21 | |
Weighted average exercise price, options forfeited/cancelled (in dollars per share) | 47.80 | |
Weighted average exercise price, options outstanding (in dollars per share) | 52.48 | |
Weighted average exercise price, options exercisable (in dollars per share) | $ 54.81 | |
Weighted average remaining contractual term outstanding | 6 years 8 months 12 days | |
Weighted average remaining contractual term exercisable | 4 years 8 months 12 days | |
Outstanding, aggregate intrinsic value | $ 10 | |
Exercisable, aggregate intrinsic value | $ 5 | |
Additional disclosures | ||
Weighted average period the unrecognized compensation cost will be recognized | 3 years | |
Unrecognized compensation cost, unvested options (in dollars) | $ 55 | |
Weighted average grant date fair value, options (in dollars per share) | $ 17.60 | |
Stock options exercised intrinsic value | $ 3 | $ 7 |
Restricted Stock Units (RSUs) | 2011 Plan | Trip Advisor | ||
Additional disclosures | ||
Weighted average period the unrecognized compensation cost will be recognized | 3 years 2 months 12 days | |
RSUs granted (in shares) | 2,661,000 | |
Weighted average grant date fair value, granted during period RSUs (in dollars per share) | $ 41.92 | |
Unrecognized compensation cost, unvested RSUs | $ 312 |
Earnings (Loss) Per Common Sh31
Earnings (Loss) Per Common Share (EPS) (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings (Loss) Per Common Share (EPS) | ||
Basic WASO (In Shares) | 75 | 75 |
Diluted WASO (In Shares) | 75 | 75 |
Assets and Liabilities Measur32
Assets and Liabilities Measured at Fair Value (Details) shares in Millions, $ in Millions | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 23, 2016USD ($) | Jun. 06, 2016$ / itemshares |
Forward Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative, Floor Price | $ / item | 38.90 | |||
Derivative, Cap Price | $ / item | 98.96 | |||
Forward Contracts | Variable postpaid forward | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt Instrument, Face Amount | $ 259 | |||
Trip Advisor | Forward Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Forward Contract Shares indexed | shares | 7 | |||
Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | $ 315 | $ 32 | ||
Short term marketable securities (note 5) | 20 | 62 | ||
Recurring | Variable postpaid forward | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset | 52 | 75 | ||
Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | 315 | 23 | ||
Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash equivalents | 9 | |||
Short term marketable securities (note 5) | 20 | 62 | ||
Recurring | Level 2 | Variable postpaid forward | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset | $ 52 | $ 75 |
Debt (Details)
Debt (Details) shares in Millions | Nov. 07, 2017 | May 12, 2017 | Jun. 23, 2016USD ($) | Aug. 21, 2014USD ($)agreement | Sep. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2018USD ($)item | Mar. 31, 2017USD ($) | Mar. 31, 2018CNY (¥)shares | Mar. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) |
Debt Financing | |||||||||||
Long-term Debt | $ 484,000,000 | $ 711,000,000 | |||||||||
Debt classified as current | (7,000,000) | (7,000,000) | |||||||||
Long-term debt (note 6) | 477,000,000 | 704,000,000 | |||||||||
Repayments of long term debt | $ 235,000,000 | $ 224,000,000 | |||||||||
Borrowings of debt | $ 5,000,000 | 270,000,000 | |||||||||
TripAdvisor's Chinese subsidiaries | |||||||||||
Debt Financing | |||||||||||
Number of credit facilities | item | 2 | ||||||||||
Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Total debt | 230,000,000 | ||||||||||
Maximum borrowing capacity | $ 1,200,000,000 | ||||||||||
Debt Instrument Term | 5 years | ||||||||||
Commitment fee | 0.15% | ||||||||||
Repayments of long term debt | $ 235,000,000 | ||||||||||
Foreign Earnings Repatriated | 325,000,000 | ||||||||||
Borrowings of debt | 5,000,000 | ||||||||||
Revolving Credit Facility | LIBOR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | LIBOR | ||||||||||
Revolving Credit Facility | ABR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | ABR | ||||||||||
Revolving Credit Facility | Prime Rate | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | Prime Rate | ||||||||||
Revolving Credit Facility | New York Fed Bank Rate | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | New York Fed Bank Rate | ||||||||||
Margin | 0.50% | ||||||||||
Revolving Credit Facility | Adjusted LIBOR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Margin | 1.00% | ||||||||||
Interest period | 1 month | ||||||||||
Letter of Credit | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Maximum borrowing capacity | 15,000,000 | ||||||||||
Same-day notice borrowings | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Maximum borrowing capacity | 40,000,000 | ||||||||||
Margin loan member | |||||||||||
Debt Financing | |||||||||||
Total debt | 212,000,000 | 210,000,000 | |||||||||
Debt instrument, number of instruments | agreement | 2 | ||||||||||
Total borrowings | $ 400,000,000 | ||||||||||
Margin loan member | Redemption period one | |||||||||||
Debt Financing | |||||||||||
Initial redemption period | 6 months | ||||||||||
Margin loan member | LIBOR | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | LIBOR | ||||||||||
Margin loan member | LIBOR | Redemption period one | |||||||||||
Debt Financing | |||||||||||
Margin | 3.65% | ||||||||||
Margin loan member | LIBOR | Redemption period two | |||||||||||
Debt Financing | |||||||||||
Margin | 3.25% | ||||||||||
Margin Loan Amendment 1 | |||||||||||
Debt Financing | |||||||||||
Total debt | $ 200,000,000 | ||||||||||
Debt Instrument Term | 3 years | ||||||||||
Variable rate basis | LIBOR | ||||||||||
Margin | 2.00% | ||||||||||
Paid-in-Kind Interest | $ 2,000,000 | ||||||||||
Outstanding Margin Loan Balance If Initial Margin Call Threshold is Met | $ 150,000,000 | ||||||||||
Margin Loan Amendment 2 | |||||||||||
Debt Financing | |||||||||||
Margin | 2.40% | ||||||||||
Chinese Credit facilities | TripAdvisor's Chinese subsidiaries | |||||||||||
Debt Financing | |||||||||||
Total debt | 7,000,000 | 7,000,000 | |||||||||
2015 Credit Facilities | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Line of Credit | 0 | ||||||||||
2015 Credit Facilities | Letter of Credit | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Outstanding letters of credit | 3,000,000 | ||||||||||
2016 Credit Facility | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Maximum borrowing capacity | $ 73,000,000 | ||||||||||
Repayments of long term debt | 73,000,000 | ||||||||||
Line of Credit | 0 | 0 | |||||||||
2016 Credit Facility | Revolving Credit Facility | LIBOR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Variable rate basis | LIBOR | ||||||||||
Margin | 1.125% | ||||||||||
Chinese Credit Facility-BOA | TripAdvisor's Chinese subsidiaries | |||||||||||
Debt Financing | |||||||||||
Line of Credit | 0 | $ 0 | |||||||||
Chinese Credit Facility-BOA | People's Bank of China base rate | TripAdvisor's Chinese subsidiaries | |||||||||||
Debt Financing | |||||||||||
Maximum borrowing capacity | 30,000,000 | ||||||||||
Debt Instrument Term | 1 year | ||||||||||
Chinese Credit Facility-JPM | Chinese Credit facilities | TripAdvisor's Chinese subsidiaries | |||||||||||
Debt Financing | |||||||||||
Maximum borrowing capacity | ¥ 70,000,000 | $ 11,000,000 | |||||||||
Debt Instrument Term | 1 year | ||||||||||
Interest rate | 4.98% | 4.98% | 5.00% | ||||||||
Line of Credit | $ 7,000,000 | $ 7,000,000 | |||||||||
Variable postpaid forward | |||||||||||
Debt Financing | |||||||||||
Total debt | $ 265,000,000 | $ 264,000,000 | |||||||||
Paid-in-Kind Interest | $ 1,000,000 | ||||||||||
Series A | Margin loan member | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Shares pledged as collateral under loan | shares | 18.2 | 18.2 | |||||||||
Share value | $ 743,000,000 | ||||||||||
Series B | Margin loan member | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Shares pledged as collateral under loan | shares | 12.8 | 12.8 | |||||||||
Share value | $ 523,000,000 | ||||||||||
Forward Contracts | |||||||||||
Debt Financing | |||||||||||
Derivative contract term | 4 years | ||||||||||
Forward Contracts | Margin loan member | |||||||||||
Debt Financing | |||||||||||
Repayments of long term debt | $ 200,000,000 | ||||||||||
Payment of paid-in-kind interest | 29,000,000 | ||||||||||
Forward Contracts | Variable postpaid forward | |||||||||||
Debt Financing | |||||||||||
Total borrowings | 259,000,000 | ||||||||||
Accreted loan total at maturity | $ 272,000,000 | ||||||||||
Minimum | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Commitment fee | 0.15% | ||||||||||
Minimum | Revolving Credit Facility | LIBOR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Margin | 1.25% | ||||||||||
Minimum | Revolving Credit Facility | ABR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Margin | 0.25% | ||||||||||
Minimum | 2016 Credit Facility | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Debt Instrument Term | 1 month | ||||||||||
Maximum | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Commitment fee | 0.30% | ||||||||||
Maximum | Revolving Credit Facility | LIBOR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Margin | 2.00% | ||||||||||
Maximum | Revolving Credit Facility | ABR | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Margin | 1.00% | ||||||||||
Maximum | 2016 Credit Facility | Revolving Credit Facility | Trip Advisor | |||||||||||
Debt Financing | |||||||||||
Debt Instrument Term | 6 months |
Segment Information - Performan
Segment Information - Performance Measures and Other Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segments | |||
Total revenues | $ 378 | $ 378 | |
Adjusted OIBDA | 78 | 69 | |
Total assets | 5,392 | $ 5,484 | |
Capital expenditures | 15 | ||
Trip Advisor | |||
Segments | |||
Total revenues | 378 | 372 | |
Adjusted OIBDA | 80 | 73 | |
Total assets | 5,319 | ||
Capital expenditures | 15 | ||
Corporate and Other | |||
Segments | |||
Total revenues | 6 | ||
Adjusted OIBDA | (2) | $ (4) | |
Total assets | $ 73 |
Segment Information - Adjusted
Segment Information - Adjusted OIBDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Information | ||
Consolidated segment Adjusted OIBDA | $ 78 | $ 69 |
Stock-based compensation | (30) | (20) |
Depreciation And amortization | (39) | (56) |
Operating Income (Loss) | 9 | (7) |
Interest expense | (6) | (5) |
Realized and unrealized gains (losses) on financial instruments, net | (23) | 6 |
Other, net | 1 | 1 |
Total | $ (19) | $ (5) |